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Full text of "North Carolina Register v.8 no. 15 (11/1/1993)"

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J<IORTH CAROLINA 

REGISTER 



IN TfflS ISSUE 



EXECUTIVE ORDER 

IN ADDITION 

Final Decision Letter 




PROPOSED RULES 

Administrative Hearings, Office of 

Certified Public Accountant Examiners 

Electrolysis Examiners 

Environment, Health, and Natural Resources 

Human Resources 

Insurance 

Medical Examiners 

Mortuary Science 

Nursing, Board of 

Occupational Therapy 

State Personnel 



RRC OBJECTIONS 



RULES INVALIDATED BY JUDICIAL DECISION 



CONTESTED CASE DECISIONS 



ISSUE DATE: November 1, 1993 



Volume 8 • Issue 15 • Pages 1368 - 1512 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMTNTSTRATTVF, rODE 



NORTH CAROLINA REGISTER 



TEMPORARY RULES 



The North Carolina Register is published twice a month and 
contains information relating to agency, executive, legislative and 
judicial actions required by or affecting Chapter 150B of the 
General Statutes. All proposed administrative rules and notices of 
public hearings filed under G.S. 150B-21.2 must be published in 
the Register. The Register will typically comprise approximately 
fifty pages per issue of legal text. 

State law requires that a copy of each issue be provided free of 
charge to each county in the state and to various state officials and 
institutions. 

The North Carolina Register is available by yearly subscription 
at a cost of one hundred and five dollars (SI 05. 00) for 24 issues. 
Individual issues may be purchased for eight dollars (S8.00). 

Requests for subscription to the North Carolina Register should 
be directed to the Office of Administrative Hearings, 
P. 0. Drawer 27447, Raleigh, N. C. 27611-7447. 



Under certain emergency conditions, agencies may issue 
temporary rules. Within 24 hours of submission to OAH, the 
Codifier of Rules must review the agency's written statement of 
findings of need for the temporary rule pursuant to the provisions in 
G.S. 150B-21.1. If the Codifier determines thai the findings meet 
the criteria in G.S. 150B-21.1, the rule is entered into the NCAC. If 
the Codifier determines that the fmdings do not meet the criteria, 
the rule is returned to the agency. The agency may supplement its 
findings and resubmit the temporary rule for an additional review 
or the agency may respond that it will remain with its inir- 
position. The Codifier, thereafter, will enter the rule into the 
NCAC. A temporary rule becomes effective either when the 
Codifier of Rules enters the rule in the Code or on the sixth 
business day after the agency resubmits the rule without change. 
The temporary rule is m effect for the period specified in the rule or 
180 days, whichever is less. An agency adopting a temporary rule 
must begin rule-making procedures on the permanent rule at the 
same time the temporary rule is filed with the Codifier. 



ADOPTION AMENDMENT, AND REPEAL OF 
RULES 



NORTH CAROLINA ADMINISTRATIVE CODE 



The following is a generalized statement of the procedures to be 
followed for an agency to adopt, amend, or repeal a rule. For the 
specific statutor>' authority, please consult Article 2A of Chapter 
150B of the General Statutes. 

Any agency intending to adopt, amend, or repeal a rule must 
first publish notice of the proposed action in the North Carolina 
Register. The notice must include the time and place of the public 
hearing (or instructions on how a member of the public may request 
a hearing); a statement of procedure for public comments; the text 
of the proposed rule or the statement of subject matter; the reason 
for the proposed action; a reference to the statutory authority for the 
action and the proposed effective date. 

Unless a specific statute provides otherwise, at least 15 days 
must elapse following publication of the notice in the North 
Carolina Register before the agency may conduct the public 
hearing and at least 30 days must elapse before the agency can lake 
action on the proposed rule. An agency may not adopt a rule thai 
differs substantially from ihe proposed form published as part of 
the public notice, until the adopted version has been published in 
the North Carolina Register for an additional 30 day comment 
period. 

When final action is taken, the promulgating agency must file 
the rule with ihe Rules Review Commission (RRC). After approval 
by RRC, the adopted rule is filed with the Office of Administrative 
Hearings (OAH). 

A rule or amended rule generally becomes effective 5 busmess 
days after the rule is filed with the Office of Administrative 
Hearings for publication in the North Carolina Administrative Code 
(NCAC). 

Proposed action on rules may be withdrawn by the promulgating 
agency at any time before final action is taken by the agency or 
before filing with OAH for publication Ln the NCAC. 



The North Carolina Administrative Code (NCAC) is a 
compilation and index of the administrative rules of 25 state 
agencies and 38 occupational licensing boards. The NCAC 
comprises approximately 15,CX)0 letter size, single spaced pages of 
material of which approximately 35% of is changed annually. 
Compilation and publication of the NCAC is mandated by G.S. 
150B-21.18. 

The Code is divided into Titles and Chapters. Each state agency 
is assigned a separate title which is further broken down by 
chapters. Title 21 is designated for occupational licensing boards. 

The NCAC is available in two formats. 

(1) Single pages may be obtained at a minimum cost of 
two dollars and 50 cents (S2.50) for 10 pages or less, 
plus fifteen cents (SO. 15) per each additional page. 

(2) The full publication consists of 53 volumes, totaling in 
excess of 15,000 pages. It is supplemented monthly 
with replacement pages. A one year subscription lo ihe 
full publication including supplements can be 
purchased for seven hundred and fifty dollars 
(S750.00). Individual volumes may also be purchased 
with supplement service. Renewal subscriptions for 
supplements to the initial publication are available. 

Requests for pages of rules or volumes of the NCAC should be 
directed to the Office of Administrative Hearings. 



CITATION TO THE NORTH CAROLINA 
REGISTER 

The North Carolina Register is cited by volume, issue, page 
number and date. 1:1 NCR 101-201, April 1, 1986 refers to 
Volume 1, Issue 1, pages 101 through 201 of the North Carolina 
Register issued on April 1, 1986. 



FOR INFORMATION 


CONTACT: 


Office 


of 


Administrative Hearings, 


ATTN: Ru 


es Division, 


P.O. 


Drawer 27447, Raleigh, North Carolina 


27611 


-7447, 


(919) 


733-2678. 











NORTH 
CAROLINA 
REGISTER 



Ib.. 




Office of Administrative Hearings 

P. O. Drawer 27447 

Raleigh, North Carolina 27611-7447 

(919) 733-2678 



Julian Mann III, 

Director 
James R. Scarcella St., 

Deputy Director 
Molly Masich, 

Director of APA Services 



Staff: 

Ruby Creech, 

Publications Coordinator 
Teresa Kilpatrick, 

Editorial Assistant 
Jean Shirley, 

Editorial Assistant 

This publication is printed on permanent, 
acid-free paper in compliance with 
as.' 125-} 1.13. 



ISSUE CO>rrENTS 



I. EXECUTIVE ORDER 

Executive Order 31 1368 

II. IN ADDITION 

Voting Rights Act 1371 

III. PROPOSED RULES 
Administrative Hearings, 

Office of 

Hearings Division 1480 

Environment, Health, and 
Natural Resources 

Coastal Management 1405 

Health Services 1417 

Wildlife Resources 1409 

Human Resources 

Aging, Division of 1372 

Social Services Commission .... 1376 

Insurance 

Actuarial Services Division .... 1403 

Agent Services Division 1399 

Life and Health Division 1400 

Property and Casualty 1400 

Licensing Boards 
Certified Public Accountant 

Examiners 1418 

Electrolysis Examiners 1457 

Medical Examiners 1458 

Mortuary Science 1461 

Nursing, Board of 1463 

Occupational Therapy 1469 

State Personnel 

Office of State Personnel 1472 

IV. RRC OBJECTIONS 1485 

V. RULES INVALIDATED BY 

JUDICIAL DECISION 1489 

VI. CONTESTED CASE DECISIONS 

Index to ALJ Decisions 1490 

Text of Selected Decisions 

91 OSPOOll 1498 

92 OSP 1082 1500 

93 EHR 0003 1503 

VI. CUMULATIVE INDEX 1510 



NORTH CAROLINA REGISTER 

Publication Schedule 
(July 1993 - May 1994) 



Volume 
and 
Issue 

Number 


Issue 
Date 


Last Day 

for 

Filing 


Last Day 
for Elec- 
tronic 
Filing 


Earliest 

Date for 

Public 

Hearing 

75 days 
from 
notice 


* End of 

Required 

Comment 

Penod 

30 days 

from 

notice 


Last Day 

to Submit 

toRRC 


** Earliest 

Effective 

Date 


8:7 


07/01/93 


06/10/93 


06/17/93 


07/16/93 


08/02/93 


08/20/93 


10/01/93 


8:8 


07/15/93 


06/23/93 


06/30/93 


07/30/93 


08/16/93 


08/20/93 


10/01/93 


8:9 


08/02/93 


07/12/93 


07/19/93 


08/17/93 


09/01/93 


09/20/93 


11/01/93 


8:10 


08/16/93 


07/26/93 


08/02/93 


08/31/93 


09/15/93 


09/20/93 


11/01/93 


8:11 


09/01/93 


08/11/93 


08/18/93 


09/16/93 


10/01/93 


10/20/93 


12/01/93 


8:12 


09/15/93 


08/24/93 


08/31/93 


09/30/93 


10/15/93 


10/20/93 


12/01/93 


8:13 


10/01/93 


09/10/93 


09/17/93 


10/18/93 


11/01/93 


11/22/93 


01/01/94 


8:14 


10/15/93 


09/24/93 


10/01/93 


11/01/93 


11/15/93 


11/22/93 


01/01/94 


8:15 


11/01/93 


10/11/93 


10/18/93 


11/16/93 


12/01/93 


12/20/93 


02/01/94 


8:16 


11/15/93 


10/22/93 


10/29/93 


11/30/93 


12/15/93 


12/20/93 


02/01/94 


8:17 


12/01/93 


11/05/93 


11/15/93 


12/16/93 


01/03/94 


01/20/94 


03/01/94 


8:18 


12/15/93 


11/24/93 


12/01/93 


12/30/93 


01/14/94 


01/20/94 


03/01/94 


8:19 


01/03/94 


12/08/93 


12/15/93 


01/18/94 


02/02/94 


02/21/94 


04/01/94 


8:20 


01/14/94 


12/21/93 


12/30/93 


01/31/94 


02/14/94 


02/21/94 


04/01/94 


8:21 


02/01/94 


01/10/94 


01/18/94 


02/16/94 


03/03/94 


03/21/94 


05/01/94 


8:22 


02/15/94 


01/25/94 


02/10/94 


03/02/94 


03/17/94 


03/21/94 


05/01/94 


8:23 


03/01/94 


02/08/94 


02/15/94 


03/16/94 


03/31/94 


04/20/94 


06/01/94 


8:24 


03/15/94 


02/22/94 


03/10/94 


03/30/94 


04/14/94 


04/20/94 


06/01/94 


9:1 


04/04/94 


03/11/94 


03/18/94 


04/19/94 


05/04/94 


05/20/94 


07/01/94 


9:2 


04/15/94 


03/24/94 


03/31/94 


05/02/94 


05/16/94 


05/20/94 


07/01/94 


9:3 


05/02/94 


04/11/94 


04/18/94 


05/17/94 


06/01/94 


06/20/94 


08/01/94 


9:4 


05/16/94 


04/25/94 


05/02/94 


05/31/94 


06/15/94 


06/20/94 


08/01/94 



Note: Time is computed according to the Rules of Civil Procedure, Rule 6. 

* An agency must accept comments fe>r at least 30 days after the proposed text is published or until the date 
of any public hearing, whichever is longer See G.S. 150B-21. 2(f) for adoption procedures. 

** The "Earliest Effective Date" is computed assuming that the agency follows the publication schedule above, 
that the Rules Review Commission approves the rule at the next calendar month meeting after submission, and 
that RRC delivers the rule to the Codifier of Rules five (5) business days before the 1st business day of the next 
calendar month. 



Re\ised 07/93 



EXECUTIVE ORDER 



EXECUTIVE ORDER NUMBER 31 

STATE COMMISSION ON NATIONAL 

AND COMMUNITY SERVICE 

WHEREAS, the increasing realization of the 
importance of volunteerism and civic participation, 
the growing recognition of community service as 
a means of community and state problem-solving, 
and the revival of national service as an avenue for 
addressing many of the country's unmet social, 
environmental, educational, and public safety 
needs have revealed new options for enhancing the 
quality of life for North Carolinians; and 

WHEREAS, promoting the capability of North 
Carolina's people, communities, and enterprises to 
work collaboratively is vital to the long-term 
prosperity of this state; and 

WHEREAS, building and encouraging communi- 
ty service as an integral part of the formula to our 
growth as a state and as a nation requires coopera- 
tive efforts by the public sector, the private sector, 
the nonprofit sector, and partnerships among these 
sectors; and 

WHEREAS, a State commission is necessary to 
advise and assist in the development of a compre- 
hensive, statewide service plan for promoting 
volunteer involvement and citizen participation in 
North Carolina; 

NOW, THEREFORE, by the authority vested in 
me as Governor by the Constitution and laws of 
North Carolina, IT IS ORDERED: 

Section L Establishment. 

The State Commission on National and Commu- 
nity Service ("Commission") is hereby established 
to encourage community service and volunteer 
participation as a means of community and state 
problem-solving; to promote and support voluntary 
citizen involvement in government and private 
programs throughout the state; to develop a long- 
term, comprehensive vision and plan for action for 
community service initiatives in North Carolina; 
and to serve as the state's liaison to national and 
state organizations which support its mission. 

Section 2. Membership. 

A. Members of the Commission shall be ap- 
pointed by the Governor on a bipartisan basis. It 
shall consist of no fewer than 15 and no more than 
25 members. Not more than 50 percent of the 
Commission plus one member may be from the 



same political party. To the extent possible, it 
shall be balanced according to race, ethnicity, age, 
disability, and gender. In establishing the Com- 
mission, the Governor shall appoint one-third of 
the initial members for a term of one year; one- 
third for a term of two years; and one-third for a 
term of three years. Following expiration of these 
initial terms, all appointments shall be for three- 
year terms. Members may not serve two consecu- 
tive terms. 

B. The Commission shall include: 

(1) An individual with expertise in the educa- 
tional, training, and developmental needs 
of youth, particularly disadvantaged 
youth . 

(2) An individual with experience in promot- 
ing the involvement of older adults in 
service and volunteerism. 

(3) A representative of community-based 
agencies or community-based organiza- 
tions within the State. 

(4) The Superintendent of the Department of 
Public Instruction, or his designee. 

(5) A representative of local governments in 
the State. 

(6) A representative of local labor organiza- 
tions in the State. 

(7) A representative of business. 

(8) An individual between the ages of 16 and 
25 who is a participant or supervisor in a 
volunteer or service program. 

(9) A representative of the Corporation for 
National and Community Service de- 
scribed in Section 122(a) of the United 
States Public Law 103-82 ("PL."), as a 
non-voting, ex officio member. 

C. The Commission may include: 

(1) Members selected from among local 
educators. 

(2) Members selected from among experts in 
the delivery of human, educational, 
environmental, or public safety services 
to communities and persons. 

(3) Representatives of Native American 
tribes. 

(4) Members selected from among out-of- 
school youth or other at-risk youth. 

(5) Representatives of entities that receive 
assistance under the Domestic Volunteer 
Service Act of 1973 (42 U.S.C. 4950 et 
seq.) 

D. Not more than 25 percent of the Commission 
members may be employees of state government, 
though additional state agency representatives may 
sit on the Commission as non-voting, ex officio 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1368 



EXECUTIVE ORDER 



members. 

E. Vacancies among the members shall be filled 
by the Governor to serve for the remainder of the 
term. 

Section 3. Officers. 

The Officers of the Commission shall be Chair, 
Vice-Chair, Secretary, and Treasurer. All officers 
shall be elected by the voting Commission mem- 
bers from among their ranks and shall serve for a 
term of one year. Vacancies in any offices shall 
be filled with an election by the Commission for 
the remainder of the unexpired term. 

a. Chair: It shall be the responsibility of 
the Chair to preside at all meetings of the 
Commission; to appoint all committee 
chairs; to assist all chairs in the planning 
of committee activities; to supervise all 
chairs as to the management of commit- 
tee plans; to authorize and execute the 
wishes of the board; to call all special 
meetings with the approval of the 
Governor's Office of Citizen Affairs 
Director; and to be an ex officio member 
of all committees. 

b. Vice-Chair: The Vice-Chair shall assist 
the Chair, and, in the absence of the 
Chair, perform those duties. The Vice- 
Chair shall accept special assignments 
from the Chair and perform other duties 
as delegated by the Commission. 

c. Secretary: The Secretary shall be 
responsible for the minutes of the 
meetings of the Commission and the 
Executive Committee; shall keep an 
updated list of names, addresses, and 
telephone numbers of all Commission and 
Standing Committee members; and shall 
keep a record of attendance at meetings. 

d. Treasurer: The Treasurer shall oversee 
the preparation of all funding 
applications. The Treasurer shall also 
report on finances to the Commission at 
each meeting. 

Section 4. Governor's Voluntary Advisory 
Council. 

The Commission is the successor group to the 
Governor's Voluntary Advisory Council, formed 
by Martin Administration Executive Order 139. 
Therefore, all its functions and records shall be 
transferred to the Commission. That Council is 
hereby disbanded and the Executive Order, as 
amended by Order 185, is hereby rescinded. 



Section 5. Standing Committees. 

The standing Committees shall advise and assist 
the Commission in carrying out its duties and 
responsibilities. Committee chairs shall be 
appointed by the Commission Chair from among 
Commission members, but the committees' 
members need not be limited to Commission 
members. The Commission Chair, in consultation 
with the Committee Chairs, shall name the 
committees' members. Standing Committees of 
the Commission shall include: 

a. Youth Voice: The Standing Committee 
on Youth Voice shall have no more than 
fifteen members between the ages of 16 
and 25. It responsibilities shall include 
developing and recommending policies 
and programs to the Commission as well 
as bringing the perspective of young 
people to all Commission discussions and 
decisions. 

b. Volunteer Recognition: The Standing 
Committee on Volunteer Recognition 
shall assist with the implementation of 
Governor's awards relating to exemplary 
volunteer service in the State; work with 
individual communities to develop local 
recognition programs; and explore 
additional opportunities to recognize 
individuals and organizations addressing 
community needs through volunteer 
service. 

c. Evaluation: The Standing Committee on 
Evaluation shall evaluate each program 
funded by the Corporation for National 
and Community Service (described in the 
RL. 103-82) and state organizations 
which support the purpose of the 
Commission to assure their on-going 
quality. 

d. Community Collaboration: The Standing 
Committee on Community Collaboration 
shall promote communication and 
information sharing between state and 
local private and public initiatives to meet 
community needs. 

e. Resource Development: The Standing 
Committee on Resource Development 
shall develop and implement strategies to 
secure local, state, and federal resources 
to reinforce, expand, and initiate quality 
community programs across the state. 

Section 6. Meetings. 

The Commission shall meet at least quarterly. 
Failure to attend at least 75 percent of called 



1369 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



EXECUTIVE ORDER 



meetings in any calendar year shall result in 
removal from the Commission. A quorum shall 
consist of a simple majority of voting members. 

Section 7. Duties. 

The Commission shall, in the performance of its 
tasks and functions: 

a. Ensure that its funding decisions meet all 
federal and state statutory requirements. 

b. Recommend innovative, creative, 
statewide service programs to increase 
volunteer participation in all age groups 
and community-based problem-solving 
among diverse participants. 

c. Develop and implement a centralized, 
organized system of obtaining 
information and technical support 
concerning volunteerism and community 
service recruitment, projects, training 
methods, materials, and activities 
throughout North Carolina. Share such 
information and support upon request. 

d. Promote strong interagency collaboration 
as an avenue for maximizing resources 
and provide that model on the State level . 

e. Provide public recognition and support of 
individual volunteer efforts and 
successful or promising private sector 
initiatives and public/private partnerships 
which address community needs. 

f. Stimulate increased community awareness 
of the impact of volunteer services in 
North Carolina. 

g. Utilize local, state, and federal resources 
to reinforce, expand, and initiate quality 
service programs. 

h. Assist the Governor's Office of Citizen 

Affairs in the planning and 
implementation of volunteer programs. 

i. Serve as the state's liaison and voice to 

appropriate national and state 
organizations which support its mission. 

j. Prepare a national three-year service plan 

for the State which follows state and 
federal guidelines. 

k. Prepare the financial assistance 

applications of the State under Sections 
117B and 1301 of the PL. 103-82. 

1. Assist in the preparation of the 

application of the North Carolina 
Department of Public Instruction for 
assistance under Section 113 of the PL. 
103-82. 

m. Prepare the State's application under 
Section 130 for the approval of service 



positions such as the national service 
educational award described in Subtitle D 
of the PL. 103-82. 

n. Make technical assistance available to 

enable applicants for assistance under 
Section 121 to plan and implement 
service programs; and to apply for 
assistance under the federal service laws 
such as the PL. 103-82. 

o. Assist in the provision of health care and 

child care benefits under Section 140 to 
participants in national service programs 
that receive assistance under Section 121 
of the PL. 103-82. 

p. Develop a state system for the 

recruitment and placement of participants 
in programs that receive assistance under 
the national service laws and disseminate 
information concerning national service 
programs that receive such assistance or 
approved national service positions. 

q. Administer the State's grant program in 

support of national service programs 
(using assistance provided to the State 
under Section 121 of the PL. 103-82) 
including selection, oversight, and 
evaluation of grant recipients. 

r. Coordinate its functions (including re- 

cruitment, public awareness, and training 
activities) with any division of the federal 
ACTION program or the Corporation for 
National and Community Services out- 
lined in the PL. 103-82. 

Section 8. Administration and Expenses. 

The Governor's Office of Citizen Affairs shall 
provide necessary administrative and staff support 
services to the Commission. The Commission is 
authorized to accept funds and in-kind services 
from other state and federal entities, as authorized 
by the North Carolina Executive Budget Act. No 
per diem allowance shall be paid to members of 
the Commission. Members of the Commission 
and staff may receive necessary travel and subsis- 
tence expenses in accordance with state laws. 
These expenses shall be paid from federal funds 
where possible. If federal funds are not available, 
these expenses may be paid only if the Governor's 
Office has sufficient funds. 

This Order is effective immediately. 

Done in Raleigh, North Carolina, this the 1st day 
of October, 1993. 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1370 



IN ADDITION 



1 his Section contains public notices that are required to be published in the Register or have been fl 

approved by the Codifier of Rules for publication. 



U.S. Department of Justice 

Civil Rights Division 

JPT:GS:CEI:tlb Voting Section 

DJ 166-012-3 P.O. Box 66128 

93-2847 Washington, D.C. 20035-6128 

October 12, 1993 

DeWitt F. McCarley, Esq. 

City Attorney 

P. O. Box 7207 

Greenville, North Carolina 27835-7207 

Dear Mr. McCarley: 

This refers to four annexations [Ordinance Nos. 2631, 2637-2639 (1993)] and their designation to 
districts of the City of Greenville in Pitt County, North Carolina, submitted to the Attorney General 
pursuant to Section 5 of the Voting Rights Act of 1965, as amended, 42 U.S.C. 1973c. We received your 
submission on August 12, 1993. 

The Attorney General does not interpose any objection to the specified changes. However, we note 
that Section 5 expressly provides that the feilure of the Attorney General to object does not bar subsequent 
litigation to enjoin the enforcement of the changes. See the Procedures for the Administration of Section 
5 (28 C.ER. 51.41). 



Sincerely, 

James P. Turner 

Acting Assistant Attorney General 

Civil Rights Division 



By: 



Steven H. Rosenbaum 
Chief, Voting Section 



{ 



1371 8:15 NORTH CAROLINA REGISTER November 1, 1993 



PROPOSED RULES 



TITLE 10 - DEPARTMENT OF 
HUMAN RESOURCES 

J\otice is hereby given in accordance with G.S. 
150B-21.2 that the Division of Aging intends to 
adopt rules cited as 10 NCAC 22T.0101, .0201 - 
.0205; 22U .0101 - .0102, .0201 - .0205; 22V 
.0101, .0201 - .0203; 22W .0101 - .0102, .0201 - 
.0205. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 2:00 
p.m. on November 16, 1993 at the Division of 
Aging, 693 Palmer Dr , Room 127, Raleigh, N. C. 
27626-0531. 

ixeason for Proposed Action: 
10 NCAC 22T.0101, .0201 - .0203 - Implementa- 
tion of policy for providing health screening 
services for older persons. 

10 NCAC 22U .0101 - .0102, .0201 - .0205 - 
Implementation of policy for providing senior 
companion services to older persons. 
10 NCAC 22V. 0101, .0201 - .0203 - Implementa- 
tion of policy to provide a volunteer development 
program for older persons. 
10 NCAC 22W .0101 - .0102, .0201 - .0205 - 
Implementation of policy to provide home health 
services to older persons. 

Comment Procedures: Written comments may be 
received by the Director of the Division of Aging 
through December 1 , 1993. Verbal comments will 
be heard at the public hearing. 

CHAPTER 22 - OFFICE FOR AGING 

SUBCHAPTER 22T - HEALTH SCREEIVING 
SERVICES 

SECTION .0100 - SCOPE OF SERVICE 

.0101 SCOPE OF HEALTH SCREENING 
SERVICES 

As used in this Subchapter, the following defini- 
tion of Health Screening Services shall apply. 
Health Screening Services consist of: 

(1) an evaluation of personal and family 
medical history information: 



(2) testing for diseases or health problems so 
as to detect problems or abnormalities or 
to identify factors that may make a per- 
son at risk for a health condition or 
problem: and 

(3) health counseling and referral for those 
individuals identified to be at risk of 
health problems or to have abnormalities. 

Statutory Authority G.S. 1 43 B- 18 1.1(c). 

SECTION .0200 - SERVICE PROVISION 

.0201 PROVISION OF HEALTH 
SCREENING SERVICES 

(a) Health Screening Services shall: 

(1) be provided at facilities that are able to 
ensure individual privacy while con- 
ducting screening activities; 

(2) include, at a minimum, basic screenings 
of height and weight, blood pressure. 
and visual acuity; 

(3) include a medical history questionnaire 
for participants; and 

(4) provide individualized counseling to 
participants. 

(h) Medical treatment may not be provided as 
part of the health screening service. 

Statutory Authority G.S. 143B-181.1(c). 

.0202 ELIGIBILITY FOR HEALTH 
SCREENING SERVICES 

Persons eligible for Health Screening Services 
shall include persons 60 years of age or older: 

(1) who are at the highest risk of having or 
developing health problems; 

(2) who have not sought primary medical 
care: and 

(3) who may be at risk of developing health 
problems. 

Statutory Authority G.S 143B- 181. 1(c). 

.0203 PERSONNEL REQUIREMENTS 

All personnel providing services shall meet 
relevant licensure and certification requirements 
established by North Carolina General Statutes. 

Statutory Authority G.S 143B-181.1(c). 

SUBCHAPTER 22U - SENIOR COMPANION 

SECTION .0100 - SCOPE OF SERVICE 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1372 



PROPOSED RULES 



.0101 SCOPE OF SENIOR COMPANION 

Primary Service. Senior Companion programs 
serve a dual purpose: 

(1) the Senior Companion program provides 
part-time stipended volunteer community 
service opportunities for low-income 
persons aged 60 and over; and 

(2) the Senior Companion program provides 
one-on-one assistance to adults who have 
developmental disabilities or other medi- 
cal or social problems or both who would 
benefit from companionship, therefore 
preventing isolation. 

Statutory^ Authority G.S. 1438- 18 1.1(c). 

.0102 DEFINITION OF VOLUNTEER 
STATION 

Volunteer Station is a public agency, private 
non-profit organization, or proprietary health care 
agency or organization that accepts responsibility 
for assignment and supervision of Senior Compan- 
ions. 

Statutory^ Authority G.S. 143B-181.1(c). 

SECTION .0200 - SERVICE PROVISION 

.0201 SENIOR COMPANION ELIGIBILITY 

Older adults 60 years of age or older, whose 
income is below 125 percent of the federally 
established poverty level, may apply to become 
Senior Companions. 

Statutory Authority G.S. 143B-181.1(c). 

.0202 LETTER OF AGREEMENT 

(a) Volunteer stations managing in-home place- 
ments shall develop a Letter of Agreement with the 
Senior Companion and the individual receiving 
Senior Companion services authorizing and de- 
scribing the Senior Companion's activities in each 
home. 

(b) The individual receiving Senior Companion 
services, or his or her legal representative(s), and 
the volunteer station staff" must sign the Letter of 
Agreement. 

Statutory Authority^ G.S. 143B-181.1(c). 

.0203 HOURS 

Senior Companions must serve 20 hours of 
volunteer service per week. 

Statutory Authority G.S. 143B-181.1(c). 



.0204 TRAINING AND COMPETENCY 

Senior Companions must receive at least 40 
hours of pre-service orientation and four hours of 
monthly in-service training from the volunteer 
station. 

Statutory Authority G.S. 143B-181.1(c). 

.0205 TERMINATION 

Terminating individuals receiving Senior Com- 
panion services, for reasons such as increased 
medical needs, family or friends assuming the 
caregiving role, or the relationship between the 
Senior Companion and the individual receiving 
Senior Companion services is no longer benefiting 
either individual, must be made jointly by the 
project and the volunteer station stafl". 

Statutory Authority G.S. 143B- 18 1.1(c). 

SUBCHAPTER 22V - VOLUNTEER 
PROGRAM DEVELOPMENT 

SECTION .0100 - SCOPE OF SERVICE 

.0101 SCOPE OF VOLUNTEER PROGRAM 
DEVELOPMENT SERVICE 

Volunteer Program Development is the develop- 
ment of a systematic process of utilizing volunteers 
of all ages to assist in providing services to older 
adults within the community. 

Statutory Authority G.S 143B-181.1(c). 

SECTION .0200 - SERVICE PROVISION 

.0201 NEEDS ASSESSMENT 

(a) Each agency providing Volunteer Program 
Development must conduct or update, or both, an 
annual needs assessment to determine the need for 
volunteers to assist in providing services to older 
adults within the community. 

fb) If the needs assessment indicates the need for 
volunteers, then the agency shall: 

(1) develop and maintain a file of potential 
volunteer opportunities; 

(2) design written job descriptions for each 
volunteer assignment which include job 
title, job res ponsibilities, required 
training or orientation, or both regard- 
ing the assignment, date and time of 
assignment, location of assignment, 
extent of commitment. level of 
on-the-job supervision needed, and 
name of supervisor; 



1373 



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November 1, 1993 



PROPOSED RULES 



141 
£5} 

£6} 

m 

(8} 



19] 
(10) 



iiii 
(12) 



promote volunteer involvement through 

use of the media and other public 

relations techniques; 

interview volunteers for assessment of 

skills and assignments; 

develop written procedures regarding . 

acceptance, denial, or termination of 

volunteers; 

negotiate time commitments from each 

volunteer for each assignment; 

establish and maintain a system of 

recording volunteer hours; 

provide orientation and training for 

volunteers prior to or at time of 

assignment: 

provide for supervision of volunteers; 

monitor and evaluate volunteer 

assignment and performance; 

provide formal recognition of 

volunteers; and 

develop and maintain personnel files on 

all volunteers. 



Statutory Authority G.S. 143B-181.1(c). 

.0202 ADEQUACY OF INSURANCE 

Agency's providing Volunteer Program 
Development shall provide liability insurance 
coverage for volunteers providing volunteer duties. 

Statutory Authority G.S 1 43 B- 18 1.1(c). 

.0203 DOCUMENTATION 

(a) Each agency providing Volunteer Program 
Development must maintain a log of active 
volunteers and their assignments. 

(b) The log must include the volunteer's name, 
date of enrollment, and volunteer assignment. 

Statutory Authority G.S 143B-181. 1(c). 

SUBCHAPTER 22W - HOME HEALTH 
SERVICES 

SECTION .0100 - SCOPE OF SERVICES 

.0101 SCOPE OF HOME HEALTH 
SERVICES 

As used in this Subchapter, the following 
definition of Home Health Services shall apply: 

(1) Home Health Services provide skilled 
medical services to individuals in need of 
such services with the goal of 
maintaining or improving the individual's 
health status within the individual's 



home. 

(2) Allowable Home Health Services include: 
skilled nursing, physical therapy, speech 
therapy, occupational therapy, medical 
social services, and nutrition care. 

(3) Home Health Services shall be prescribed 
by a physician. 

Statutory Authority G.S 131E-142; 143B-181.1(c). 

.0102 DESCRIPTION OF HOME HEALTH 
SERVICES 

As used in this Subchapter, the following 
descriptions of Home Health Services shall apply 
for older adults: 
(I) Nursing Services are offered by a 
licensed home care agency and are 
provided by a registered nurse or a 
licensed practical nurse under the 
supervision of a registered nurse, and in 
accordance with the North Carolina 
Nursing Practice Act, G.S. 90, Article 
9A and the plan of care. 
Physical Therapy is ofFered by a licensed 
home care agency and is performed by a 
licensed physical therapist or a licensed 
physical therapy assistant under the 
supervision of a licensed physical 
therapist and in accordance with G.S. 90, 
Article 18B, Physical Therapy, and the 
plan of care. 



12} 



14] 



£5} 



(3) Occupational TTierapy is offered by a 
licensed home care agency and provided 
by licensed occupational therapists or 
occupational therapy assistants as defined 
in G.S. 90, Article 18D, Occupational 
Therapy, and in accordance with the plan 



of care. 



16} 



Speech Therapy is offered by a licensed 
home care agency and provided by a 
North Carolina licensed speech therapist 
as defined in G.S. 90, Article 22, North 
Carolina Licensure Act for Speech and 
Language Pathologists and in accordance 
with the plan of care. 
Medical Social Services are offered by a 
licensed home care agency and is 
provided by a master's degree social 
worker or by a medical social worker 
assistant under the supervision of a 
master's degree social worker and ]n 
accordance with the plan of care. 
Nutrition Care Services are ofiFered by a 
licensed home care agency and provided 
by a licensed dietitian or nutritionist ]n 



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November 1, 1993 



1374 



PROPOSED RULES 



accordance with the Dietetics and 
Nutrition Practice Act as defined in G.S. 
90. Article 25 and in accordance with 
physician's signed orders. 



Statutory Authority G.S. 131E-142; 143B- 181. 1(c). 

SECTION .0200 - SERVICE PROVISION 

.0201 ELIGIBILITY FOR HOME HEALTH 
SERVICES 

Individuals eligible for services must be 60 years 
of age or older and m need of physician prescribed 
medical care which they or their caregiver are 
unable to adequately provide and which can be 
provided safely in their own home. 

Statutory Authority G.S. 131E-142: 143B-181.1(c). 

.0202 SERVICE DELIVERY 

(a) Home Health Services are skilled health 
services which shall be provided on an intermittent 
basis to clients in need of medical care which can 
be provided in their own home. 

(b) All personnel providing services including 
nursing. physical therapy. speech therapy, 
occupational therapy, medical social services or 
nutrition care activities shall assure that all efforts 
complement one another and support the care plan. 

(c) Service delivery requirements include: 

(1) Documenting each client contact in 
client record; 

(2) Making an assessment of each client 
upon referral; 

(3) Assisting with the development of a 
care plan which is authorized by the 
physician responsible for the client's 
medical care; 

(4) Reassessing clients and reviewing the 
plan of care according to policies and 
procedures of the home health agency; 

(5) Notifying the physician responsible for 
the client's medical care of any 
changes, such as the client's physical or 
environmental conditions, that suggest 
a need to alter the plan of care; 

(6) Administering drugs and treatments 
only as directed by the physician 
responsible for the client's medical 
care; 

(7) Signing of written or verbal orders or 
both by the physician responsible for 
the client's medical care within two 
weeks of issuing the order(s). The 
registered nurse shall record verbal 



orders provided by the Physician re- 
sponsible for the client's medical care 
involving drugs and nursing treatments; 

(8) Verbal orders for allied health services 
other than nursing shall be given to 
either a licensed nurse or the appropri- 
ate health care professional as defined 
in 10 NCAC 3L .0901. recorded and 
signed by the person receiving the 
orders and countersigned by the physi- 
cian responsible for the client's medical 
care within two weeks of issuing the 
order(s); 

(9) Reviewing all medications a client may 
be taking to identify possible ineflFective 
drug therapy or adverse reactions, 
significant side effects, drug allergies, 
contraindicated medication, and report- 
in g any problems to the physician re- 
sponsible for the client's medical care; 
and 

(10) The availability of a qualified individu- 
al, such as a physician or public health 
nurse, at all times during operating 
hours. 

Statutory Authority G.S. 131E-142; 1438-181. 1(c). 

.0203 STAFF QUALIFICATIONS 

(a) Skilled nursing and other therapeutic services 
shall be provided under the supervision and direc- 
tion of a physician or a registered nurse. 

(b) Staff qualifications shall be documented in 
the personnel records and include: 

(1) documentation of a current North Caro- 
lina license to perform the home health 
service provided; 

(2) performance evaluations; and 

(3) required health examinations. 

Statutory Authority G.S. 131E-142; 143B-181.1(c). 

.0204 CLIENT RECORDS 

(a) Records shall be kept for each Home Health 
Services client and shall include the following 
admission data: 

(1) identification data (name, telephone 

number, date of birth, sex, marital 

status, social security number): 

source of referral; 

name of physician(s) responsible for the 

client's care; 

admission and discharge dates from 

hospital or other institutions when 

a pplicable; 



12} 
£31 

14] 



1375 



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NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



15} 
£6} 



assessment of home environment; 



names of family members, next of kin 
or legal guardian or both; 

£7} a copy of the Client's Bill of Rights and 
documentation showing that each client 
has received a copy of his rights and, 
responsibilities; and 

(8) a signed Advanced Directive, if submit- 
ted by the client, 
(b) Records shall also include the following 
service data: 



ill 
(21 

(31 
i4i 

15} 
16} 



client's diagnosis: 

physician's orders for pharmaceuticals 

and medical treatments ; 

initial assessment by appropriate profes- 

sionah 



a record of all services provided with 
entries dated and signed by the individ- 
ual providing the service; 
identification of problems, the establish- 
ment of goals and proposed interven- 
tions; 

discharge summary which includes an 
overall summary of the services provid- 
ed by the agency and the date and 
reason for discharge. When a specific 
service to a client is terminated and 
other services continued, there shall be 
documentation of the date and reason 
for terminating the specific service; and 
(7) evidence, as documented in the client 
records, of coordination of services 
when the client is receiving more than 
one home care service, 
(c) Clients' records shall be retained for at least 
five years from the date of the most recent dis- 
charge of the client. 

Statutory Authority G.S. 131E-142; 143B-181.1(c). 

.0205 QUALITY ASSURANCE 

Home Health Services shall be provided by an 
agency licensed as a home care agency in North 
Carolina in accordance with the North Carolina 
Home Care Licensure Act G.S 131E-142. 

Statutory Authority G.S. 131E-142; 143B-181.1(c). 
****************** 

iSotice is hereby given in accordance with G.S. 
150B-21.2 that the Social Services Commission 
intends to adopt rules cited as 10 NCAC 35E 
.0322, 35F .0201. .0301 - .0308, 42A .0601 - 



.0608; amend 35D .0303, 35E .0104 - .0106, 
.0308; 41 F .0704. 42J .0003, 42Q, .0014, 42R 
.0204, 46G .0214, 46H .0104, 47B .0404 and 
repeal 35E .0306, 35F .0101 - .0103, .0106 - 
.0108 and 42A .0308 - .0309. 

Ihe proposed effective date of these actions are: 

February 1, 1994 
10 NCAC 41 F . 0704 
10 NCAC 46G .0214 
10 NCAC 46H .0104 

March 1. 1994 
10 NCAC 35F . 0201 . . 0301 - . 0308 

10 NCAC35D .0303 

10 NCAC42Q .0014 

10 NCAC42R .0204 
10 NCAC 35F .0101 - .0103 
10 NCAC 35F . 0106 - . 0108 
10 NCAC 35E .0104 - .0106 

10 NCAC 35E .0308 

10 NCAC 42J .0003 

10 NCAC 35 E .0306 
10 NCAC 42A .0308 - .0309 

10 NCAC 35E .0322 
10 NCAC 42A .0601 - .0608 

July 1. 1994 
10 NCAC47B .0404 



Ihe public hearing will be conducted at 10:00 
a.m. on December 1. 1993 at the Albemarle 
Building. 9th Floor Conference Room. 325 North 
Salisbury Street, Raleigh, NC 27603. 

MXeason for Proposed Action: 
10 NCAC 35D .0303, 35F .0101 - .0103, .0106 - 
.0108, .0201, .0301 - .0308, 42Q .0014, 42R 
.0204 - To establish service cost-sharing require- 
ments which will replace fee for services require- 
ments. 

10 NCAC 35E .0104 - To update the definition of 
State's Established Income. 

10 NCAC 35E .0105 - To update rule language 
which references family income and family size; to 
remove child day care services, for which eligibili- 
ty is now governed by 10 NCAC 46H .0200. and; 
to correct a typographical error. 
10 NCAC 35E .0106, .0308, 42J .0003 - To 
reflect that Foster Care Services for Adults has a 
new title. Adult Placement Services; and to narrow 



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NORTH CAROLINA REGISTER 



November 1, 1993 



1376 



PROPOSED RULES 



the scope of Health Support Services as placements 
of adults in residential health care facilities wll be 
required in rules governing Adult Placement 
Services. 

10 NCAC 35E .0306, 42 A .0308 - .0309 - To 
eliminate the current rules governing Foster Care 
Serxices to Adults since these requirements will be 
included in Adult Placement Ser\ices. 
10 NCAC 35E .0322, 42A .0601 - .0608 - To 
establish rules governing Adult Placement Services 
administered by county departments of social 
services. 

10 NCAC 41F .0704 - Effective July 1, 1993 the 
Health Services Commission repealed APA rules 
requiring inspections of family foster homes. 
Therefore, the Division of Social Serxices is re- 
questing that county social workers monitor ten 
items on an Enxironmental Conditions Checklist 
which has been prepared by the Child Welfare 
Standards staff of the NC Division of Social Servic- 
es. 

10 NCAC 46G .0214 - To comply with new state 
legislation: G.S ] 1 0-10].]. 
10 NCAC 46H .0104 - To enable county depart- 
ments of social services to determine the priority in 
which children eligible for day care subsidy will be 
served when finds are insufficient to serx'e all 
eligible children. 

10 NCAC 47B .0404 - This rule is proposed at the 
request of the Department of Human Resources in 
order to better serve the rest home population. 

(comment Procedures: Comments may be pre- 
sented in writing anytime before or at the public 
hearing or orally at the hearing. Time limits for 
oral remarks may be imposed by the Commission 
Oiairman. Any person may request copies of 
these rules by calling or xwiting Mary- Beach 
Shuping. Division of Social Serxices. 325 North 
Salisbury Street. Raleigh, NC 27603, (919) 733- 
3055. 

CHAPTER 35 - FAMILY SERVICES 



the following: 

(1) The individual has foiled to cooperate 
with the agency in determining (or rede- 
termining) eligibility; 

(2) The individual cannot be located to allow 
for determination (or redetermination) of 
eligibility; 

(3) The individual has been determined to be 
not eligible for the services requested on 
the basis that he does not meet (or be- 
cause of changing circumstances, no 
longer meets) the conditions of eligibility 
for the program funding sources under 
which the service is provided or the 
definition of the target population for 
receipt of the service; 

(4) The service is not available in the county 
in which the individual lives; 

(5) There is reasonable certainty that the 
service will not be available in sufficient 
time to ensure its prompt provision, as 
set forth in Section .05(X) of this Sub- 
chapter; 

(6) The agency has exhausted its funds for 
the provision of the service for that pro- 
gram year; 

(7) The individual has notified the agency 
that he no longer wants or needs the 
service; 

(8) The agency has determined that the indi- 
vidual is no longer able to avail himself 
of the service because he has moved to 
another county or has been admitted to 
an institution; 

■(9) The individual has refused to pay re 
quired fees; 

(9) f4#)The individual has failed to utilize 
the service or to cooperate in service 
delivery; 

(10) f44^The individual fails to meet any other 
conditions set forth in policies governing 
delivery of the service. 

Statutorx Authoritx- G.S. 143B-153. 



SUBCHAPTER 35D - CONDITIONS 
FOR PROVISION OF SERVICES 

SECTION .0300 - ELIGIBILITY' 
DETERMINATION 



SUBCHAPTER 35E - SOCIAL 
SERVICES BLOCK GRANT (TITLE XX) 

SECTION .0100 - CONDFIIONS 
OF ELIGIBILriY 



.0303 BASIS FOR DENIAL OR 

TERMINATION OF SERVICES 

Reasons for denial of an application for services 
and reasons for the termination of services include 



.0104 DEFINITION OF ESTABLISHED 
INCOME 

The established income is the median income 
150% of the Federal Poverty Level of 1992 set by 



1377 



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November 1, 1993 



PROPOSED RULES 



the federal government and printed in Volume 44, 
57 . No. 37 3r, page 5456 of the Federal Register 
of 1979. 1992 adopted by referenoc aooording to 
G.S. 150B 1 4 (b) . A copy of page 5456 of Volume 
57. No. 31 of the Federal Register may be ob- 
tained from the Planning and Information Section. 
N.C. Division of Social Services. 325 N. Salisbury 
Street. Raleigh. NC 27603. (919) 733-4530. at a 
cost of ten cents ($.10) at the time of adoption of 
this Rule. 

Statutory Authority G.S. 143B-153. 

.0105 MAXIMUM EVCOME LEVELS 
FOR SERVICES 

(a) Sixty Percent of Established Income. An 
individual whose income unit's gross monthly 
family income is less than 60 percent of the state's 
established income, adjusted according to family 
size of the income unit as defined in Rule .0103 of 
this Section , may be eligible for child day care 
services, transportation services- or federally 
funded abortion and sterilization resource items of 
health support services funded under the Social 
Services Block Grant (Title XX) aed if available in 
the county in which he lives. 

(b) Eighty Percent of Established Income. An 
individual whose income unit's gross monthly 
family income is as much as 60 percent but less 
than 80 percent of the state's established income, 
adjusted according to family size of the income 
unit as defined in Rule .0103 of this Section , may 
be eligible for federally funded abortion and 
sterilization resource items of health su pport 
services if available in the county in which he 
lives, the following service or resource items if 
available in the county in which he lives: 

f4^ child day care s ervice s ; and 
{3) federally funded abortion and stcriliza 
tion resource items of health support 
services. 
{e) One hundred Percent of Estoblished Income. 
An individual whose gross monthly family income 
is as much as 80 percent but doe s not exceed 100 
percent of the state's established income, adjusted 
according to family s ize, may be eligible for child 
day care services if it is available in the county in 
which he lives. 

Statutory Authority G.S. 143B-153(2a)b.. 

.0106 WITHOUT REGARD TO 
INCOME STATUS 

Individuals may be determined eligible for the 
following services on the basis of need for the 



service and without regard to their income: 

(1) adoption services; 

(2) foster care services for adultst placement 
services; 

(3) foster care services for children; 

(4) protective services for adults; 

(5) protective services for children; 

(6) child day care services, transportation 
services, and federally funded abortion 
and sterilization resource items of health 
support services funded under the Social 
Services Block Grant (Title XX) that are 
needed in conjunction with protective 
services may be provided without regard 
to income during the first 12 months that 
protective services are provided if such 
service is available in the county in 
which the individual lives and the agency 
has received a report pursuant to G.S. 
7A-543 or G.S. 108A-102, has initiated 
protective services in accordance with 
program policies, and has determined that 
such other services are needed to support 
the provision of protective services; 

(7) delinquency prevention (including resi- 
dential care); 

(8) employment and training support services 
(including transportation and resource 
items); 

(9) health support services (including trans- 
portation and resources for the aging, 
disabled or handicapped but excluding 
sterilization and abortion resource items); 

(10) individual and family adjustment services 
(including camping component); 

(11) problem pregnancy (including residential 
care); 

(12) community living services; 

(13) day care services for adults; 

(14) housing and home improvement services 
(including resource items); 

(15) in-home aide services (levels I through 
IV) as described in Subchapter 10 NCAC 
42H .0903 and .0904^^ which js incorpo- 
rated by reference, including subsequent 
amendments and editions. Copies of 
these Rules may be obtained from the 
Office of Administrative Hearings. Post 
Office Drawer 27447. Raleigh, NC 
27611-7447. (919) 733-2678. at a cost of 
two dollars and fifty cents ($2.50) for up 
to ten pages and fifteen cents ($.15) for 
each additional page at the time of the 
adoption of this Rule; 

(16) personal and family counseling; 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1378 



PROPOSED RULES 



(17) preparation and delivery of meals; and 

(18) residential treatment for the emotionally 
disturbed. 

Statutory Authority G.S. 143B-153(2a)b. 

SECTION .0300 - SERVICE 
DEFINITIONS 

.0306 FOSTER CARE SERVICES 
FOR ADULTS 

\€t) — Primary Service. — Foster care services for 
adults means assistance directly to, or on behalf 
of, aging, blind or disabled individuals and other 
adults in need of such service in finding licensed 
substitute homes suitable to the particular needs of 
s uch individuals when they are unable to remain in 
their own homes or when such service is needed to 
enable adults to move out of institutional core. 
Services include assessment with the individual, or 
his family, or both, considering the appropriate 
ne ss of and need for initial or continued place 
mcnt; — determining the need and arranging for 
appropriate services to support the social, emotion 
al, and physical well being of the individual during 
the placement including counseling to help the 
individual attain and maintain an adequate ps^'cho 
social adjustment; and counseling and casework 
services to support and strengthen the individual's 
relationship with his own family. — Services also 
include recruitment. — study and development of 
family — eare — homes — a&d — group — eare — facilities, 
evaluation and periodic re evaluation to determine 
if the home or facility' meets the needs of the 
individual s it s erves, and consultation and technical 
assistance to help family care homes and group 
care facilities to expand and improve the quality' of 
care provided. 

{b) — Components. None. 

(c) Resource Items. — None. 

(d) Target Population. Aging, blind, or disabled 
individuals (18 years or older) or other adults 
needing to find licen s ed s ub s titute homes when 
unable to stay in own home or moving out of 
institutional care. 

Statutory Authority G.S. 143B-153. 

.0308 HEALTH SUPPORT SERVICES 

(a) Primary Service. Health support services 
means helping individuals and families to recog- 
nize health needs including those related to alcohol 
and drug abuse; to cope with incapacities and 
limited functioning resulting from aging, disability, 
or handicap and to choose, obtain and use resourc- 



es and mechanisms of support under Medicaid 
(including the early and periodic screening, diag- 
nosis and treatment program), medicare, maternal 
and child health programs and from other public or 
private agencies or providers of health services; 
counseling and planning, as appropriate, with 
individuals, families, and health providers to help 
assure continuity of treatment and the carrying out 
of health recommendations; and helping individu- 
als to secure admission to medical institutions and 
children to secure admission to other health-related 
facilities as needed; and family planning services 
as described in (2) of this Rule. At county option, 
transportation, when not otherwise available, may 
be provided as necessary to access needed medical 
and health care resources. 

(b) Components. Family planning services to 
enable individuals and families to voluntarily limit 
the family size or to space the children, and to 
prevent or reduce the incidence of births out of 
wedlock. Such services include educational 
activities, the provision of printed materials, 
counseling about family planning and genetics, and 
help in utilizing medical and educational services 
available in the community and state. Also includ- 
ed are educational services in human sexuality 
appropriate to an individual's emotional and social 
adjustment and physical development. 

(c) Resource Items. 

(1) Mandated Resources: 

(A) For individuals who are recipients of 
AFDC, SSI, or protective services or 
whose family income is less than 80 
percent of the state's established 
income maximum for social services 
eligibility, payment for medical ser- 
vices for nontherapeutic sterilization 
and payment for abortion in cases 
where the mother's life would be 
endangered if the fetus were carried 
to term. 

(B) For women who are recipients of 
AFDC, SSI, or protective services or 
whose income does not exceed 50 
percent of the state's established 
income maximum for social services 
eligibility, payment for abortion under 
the state abortion fund. 

(2) Optional Resources. At county option 
any combination of the following re- 
source items may be provided as need- 
ed and appropriate to enable aging, 
disabled or handicapped individuals to 
attain or maintain the highest level of 
functioning possible, to promote their 



1379 



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PROPOSED RULES 



I 



I 



I 



well-being and to prevent or reduce 
inappropriate institutional care. 

(A) Assistance with communication to 
enable individuals to utilize needed 
health and medical resources and 
other community services and re- 
sources through the provision of 
interpreters for the deaf and the provi- 
sion of telephones when not otherwise 
available for the aging, disabled, or 
handicapped who are alone and home- 
bound, or who have a health or medi- 
cal condition which necessitates ready 
access to or frequent use of a tele- 
phone in their home. 

(B) Mobility assistance for aging, disabled 
and handicapped persons, through the 
installation of ramps, rails and other 
safety measures at the individual's 
home and the provision of escort 
service to health facilities and other 
needed resources for individuals 
unable to travel or wait alone. 

(C) Arranging for or providing friendly 
visitors or companions for part of a 
day to assist individuals who, because 
of frailty, physical or mental disability 
or social isolation, have limited con- 
tacts with other people. Such com- 
panionship service oflFers mental and 
physical stimulation and provides an 
opportunity for observation as to the 
need for professional help of any 
kind. 

(D) Provision of special health needs and 
supplies such as ostomy supplies, 
oxygen, bandages, orthopedic and 
other appliances needed by aging and 
disabled individuals in their own 
homes and not available through 
Medicaid, Medicare or resources 
without cost. 

(d) Target Population: 

(1) individuals or families experiencing 
health related problems; 

(2) for the family planning component, 
individuals (male or female) who are of 
age to produce children. 

Statutory Authority G.S. 143B-153. 

.0322 ADULT PLACEMEIVT SERVICES 

(a) Primary Service. Adult Placement Services 
are activities necessary to assist aging or disabled 
individuals and their families or representatives in 



finding substitute homes or residential health care 
facilities suiteble to their needs when they are 



unable to remain in their current living situations. 
Activities include completing an initial screening 
and assessment while providing counseling to help 
the individual and his family or representative to 
determine the need for initial or continued place- 
ment; assisting in the process for completing 
necessary financial applications and medical 
evaluations; helping to locate and secure placement 
in a suitable setting and level of care; supporting 
an individual and his family or representative in 
the individual's transition from one location to 
another; and providing counseling and other 
services to help the individual adjust to the new 
setting and maintain the placement. Adult Place- 
ment Services also include assisting individuals, 
when requested, to return to more independent 
settings in the community, or to relocate in more 
appropriate settings when new levels of care are 
needed. 

Adult Placement Services must be provided by 
every county department of social services. 

(b) Components. None. 

(c) Resource Items. None. 

(d) Target Population. An individual is consid- 
ered to be in the target population if Adult Place- 
ment Services are appropriate and desired based on 
one of the following client needs: 

(1) Adults who are unable to maintain 
themselves in their own homes indepen- 
dently or with available community or 
family supports. 

(2) Adults who are living in substitute 
homes, residential health care facilities 
or institutions, and who need assistance 
in relocating due to changes in the level 
of care needed or other factors indicat- 
ing that alternative settings may be 
more appropriate. 

(3) Adults who are living in substitute 
homes, residential health care facilities 
or institutions, and who need assistance 
in returning to more independent living 
arrangements in the community. 

(4) Adults who are living in substitute 
homes or residential health care facili- 
ties, and who need assistance in adjust- 
ing to or maintaining their placements 
due to individual or family problems or 
a lack of resources. 

This target population includes wards for whom 
the director or assistant director of the county 
department of social services js the guardian. 

(e) Once an individual is determined to be in the 



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November 1, 1993 



1380 



PROPOSED RULES 



target population. Adult Placement Services are 
provided in the following order of priority: 

(1) Adults receiving protective services for 
whom Adult Placement Services is in 
their protective services plans. 

(2) Adults who are at risk of abuse, ne- 
glect, or exploitation because: 

(A) they need assistance with activities of 



daily living, instrumental activities of 
daily living, or health care and they 
have no caregiver, or the caregiver is 
not able, willing or responsible to 
provide the amount or type of assis- 
tance needed; or 
(B) they were previously abused, neglect- 
ed or exploited and the conditions 
leading to that situation continue to 
exist. 

(3) Adults who have problems which place 
them at risk of losing their current 
living situations. 

(4) Adults who do not meet any of the first 
three priority groups but whose quality 
of life would be improved with Adult 
Placement Services. 

Statutory Authority G.S. 143B-153. 

SUBCHAPTER 35F - SERVICE 
COST-SHAREVG 



protective scrvicca, as described in 10 
NCAC 4 11 and 10 NCAC 4 2V up to a 
maximum of 12 months from the time 
protective scrvicos arc initiated; 

•(§) child welfare services provided aa part 

of permanency planning preventive or 
reunification services. 

Statutory Authority G.S. 143B-153. 

.0102 SERVICES FOR WHICH FEES 
ARE CHARGED 

Fees must be charged for the following services 
or resource items when these services are provided 
to individuals whose gross monthly income is at or 
above 100 p e rc e nt of the state's established income 
[median income printed in Volume 11. No. 27 of 
the Federal Register of 1979 adopted by reference 
according to G.S. 150B 1 4 (l3)] adjusted according 
to the number of persons contained in the income 

llflil . 

H^ day care services for adults; 

(3^ in home aide services; 

i%) preparation and deliver^' of meal s ; 

f4) housing and home improvement resource 

items only; and 
^ personal and family counseling services. 

Statutory Authority G.S. 143B-153. 



SECTION .0100 - FEES FOR 
SERVICES 

.0101 GENERAL FEE POLICY 

(a) — No fees will be charged for any services 
provided to the following categories of individuals: 

t4^ recipients of aid to families with depcn 

dent children payments; 

f33 recipients — ef — supplemental — security 

income benefits; 

(3^ individuals whose family gros s monthly 

income is less than 100 percent of the 
state's — established — income — (median 
income designated in th e Federal Regis 
ter of 1979). 
(b) No fee s will be charged to any client for the 
following types of s ervice s : 

{Vf protective services for adults; 

f3) protective s ervices for children; 

{^ information and referral; 

{A) any — service — provided — m — conjunction 

with protective s ervices, as described in 
10 NCAC 4 11 and 10 NCAC 4 2V up to 
a maximum of 12 month s from the time 



1381 



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November 1, 1993 



PROPOSED RULES 



.0103 AMOUNT OF FEES 

(a) The amount of the fees charged for those services shall be in accordance with the fee s chedule adopted 
by the Social Services Commission and published by the Divi s ion of Social Services. — Copies of the fee 
schedule may be obtained from the Division of Social Services, 325 North Salisbury Street, Raleigh, North 
Carolina, 2761 1. — In addition, the fee schedule is available for public inspection during normal bu s ine ss 
hours in the division offices and in each county department of social services. 

(b) The fee ochedule is as follows: 



FEE SCHEDULE 



Monthly 
Income — 



Family Size 



Fee Amount 



(As a Percentage 
of Service Cost) 



100% of 



+- 



$ 10<\ 811 



$ 921 1,10 4 



$1,138 1,365 



-40% 



*Estab. Income 



$ 8 4 5 9 8 5 



$1,105 1,288 



$1,366 1,592 



-m% 



200% of 



$ 9 8 6 1,125 
$1,126 1,266 



$1,289 1, 4 73 



$1,593 1,820 



$1, 4 7 4 1,657 



$1, 8 21 2,0 4 7 



$1,267 1, 4 07 
$1, 4 08 above 



$1,65 8 1,8 4 1 



$1, 84 2 above 



$2,0 48 2,275 
$2,276 above 



-^m%- 



-m% 



-90% 



-4«0%^ 



Estab. Income 
and above 

100% of 



$1,35 4 1,62 4 



$1,571 1.8 84 



$1,78 8 2,1 4 5 



-§&%■ 



^Eatab. Income 



$1,625 1,895 



$1,885 2,19 8 



$2,1 4 6 2,502 



-60% 



200% of 



$1, 8 96 2,165 
$2,166 2, 4 36 



$2,199 2,513 



$2,503 2,860 



$2, 4 37 2,707 
$2,708 above 



$2,51 4 2,827 
$2,82 8 3,1 4 1 



$2,861 3,217 
$3,21 8 3,575 



$3,1 4 2 above 



$3,576 above 



-=m% 



-m% 



-99% 



4m% 



Estab. Income 
and above 

100% of 



-»- 



$1,828 2,193 



$1,869 2,2 4 2 



$1,910 2,291 



-s<m- 



^Estab. Income 



$2,191 2,558 



$2,213 2.616 



$2,292 2.673 



-60% 



200% of 



$2,559 2,92 4 
$2,925 3,289 



$2,617 2,989 



$2,67 4 3,055 



$2,990 3,363 



$3,056 3, 4 37 



$3,290 3.655 
$3,656 above 



$3,36 4 3,737 $3, 4 3 8 3, 8 19 



$3,738 above 



$3, 8 20 above 



-^70% 



-m% 



-m% 



4m% 



E s tab. Income 
and above 

100% of 



W 

$1,950 2,339 



44- 



$1,991 2.388 



n 

$2,032 2. 4 37 



-m%- 



*Estab. Income 



$2,3 4 2,729 



$2,389 2.786 



$2, 4 38 2.8 44 



-60% 



200% of 



$2,730 3,119 
$3,120 3,509 



$2,787 3,185 
$3,186 3,583 



$2,8 4 5 3,250 
$3,251 3,657 



$3,510 3.899 



$3,58 4 3,9 8 1 



$3,658 4 ,063 



$3,900 above 



$3,982 above 



$ 4 ,06 4 above 



-^70% 



-80% 



-90% 



4«0% 



Estab. Income 
and above 

* — Median income designated in the Federal Register of 1979. 

Statutory Authority G.S. 143B-153. 



8:15 



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November 1, 1993 



1382 



PROPOSED RULES 



.0106 MINIMUM FEE CHARGES 

Fee charges will be di s regarded when the total 
amount due is le s s than ten dollars ($10.00) per 
month. 

Statutory Authority G.S. 143B-153. 

.0107 NON-PAYMENT OF FEES 

Reimbursement to — the — county department of 
social services or other provider will be terminated 
after a service ha s been provided for as long as 
two consecutive months without full payment of 
the fee due for provision of that service. 

Statutory Authority G.S. 143B-153. 

.0108 FEES: DEMONSTRATION 
PROJECT 

Fees — fef — chore — s ervices — provided — under — tbe 
Mecklenburg County Demon s tration Project, s hall 
be charged in accordance with the formula for 
determination of fees, available from the Depart 
mcnt of Human Resources, Division of Vocational 
Rehabilitation. 

Statutory Authority' G.S. 143B-153. 

SECTION .0200 - PURPOSE 

.0201 PURPOSE OF SERVICE 
COST-SHAREVG 

The purpose of the Service Cost-Sharing Policy 
is to extend the availability of services subject to 
cost-sharing that are administered by the Division 
of Social Services by soliciting from all clients a 
portion of the cost for services rendered based 
upon their ability to pay. Revenue collected from 
clients will be retained by the provider. 

Statutory Authority G.S. 143B-153. 

SECTION .0300 - SERVICE COST 
SHARING REQUIREMENTS 

.0301 SERVICES SUBJECT TO 
SERVICE COST SHARING 

(a) The following services, when provided by 
funds administered by the Division of Social 
Services, shall be subject to the Service Cost- 
Sharing Policies and Procedures : 

(1) Adult Day Care, including Transporta- 
tion: 



£41 
16} 



ovations or Repair and Furnishings or 
Appliance Purchases only); 
In-Home Aide Services; 



Personal and Family Counseling; 

Preparation and Delivery of Meals. 
(b) When any of the services specified in Para- 
graph (a) of this Rule are provided to adults or 
children as part of a Protective Services Plan, 
these individuals will be excluded from any cost- 
sharing requirement, up to a maximum of 12 
months. Children m foster care and children who 
have been approved to receive adoption assistance 
are also excluded from the cost-sharing require- 
ment. In addition, when any of the services 
specified in Paragraph (a) of this Rule are provid- 
ed to an Aid to Families with Dependent Children 
(AFDC) or federally administered Supplemental 
Security Income (SSI) applicant or recipient, cost- 
sharing requirements do not apply. 

Statutory Authority G.S. 143B-153. 

.0302 INITIAL REVIEW 

The following information must be reviewed with 
each client who has been determined eligible to 
receive a service subject to service cost-sharing: 
(1) the policy which requires that all clients 
receiving services subject to cost-sharing 
be requested to share in the cost of ser- 
vices rendered, based upon their ability 
to pay; 

the purpose of Service Cost-Sharing; 
the cost of the service received (actual 
cost or fixed rate per unit); actual cost 
will typically be an estimated cost based 
on the previous year's data for staff" time 
and related expenses for rendering servic- 
es subject to service cost-sharing; fixed 
rate per unit will be the specified contract 
rate when purchasing services; 
the process by which cost-sharing reve- 
nue will be collected; 



12] 
(3} 



14] 
(5] 



(6] 



the individual whom the client should 
contact with questions pertaining to ser- 
vice cost-sharing; and 
the fact that services will not be terminat- 
ed for failure to share in the cost of 
services rendered. 



ill 



Adult Day Health, including Transpor- 
tation; 
Housing and Home Improvement (Ren- 



Statutory Authority G.S. 143B-153. 

.0303 ANNUAL REVIEW 

On at least an annual basis, preferably during a 
service reassessment, agencies must review the 
following information with each individual receiv- 



1383 



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NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



Lng services subject to the Service Cost-Stiaring 
Policy: 

(1) the purpose of service cost-sharing; 

(2) the agency's cost (actual cost or fixed 
rate per unit) to provide the service or 
services received; actual cost will typical- 
ly be an estimated cost based on the 
previous year's data for staff time and 
related expenses for rendering services 
subject to service cost-sharing; fixed rate 
per unit will be the specified contract rate 
when purchasing services; 

(3) the agency's procedures for collecting 
cost-sharing revenue and the individual 
whom the client should contact with 
questions pertaining to service cost-shar- 
ing; and 

(4) the fact that services will not be terminat- 
ed for failure to share in the cost of 
service rendered. 

Statutory Authority G.S. 143B-153. 

.0304 INCOME DETERMINATION 

Income may be self-declared by the client or his 
designated representative or may be verified at 
county option. 

Statutory Authority G.S. 143B-153. 



the cost of services rendered; and 
(6) space for signatures by the client or 
designated representative and the agen- 
cy representative indicating that the 
form has been reviewed with the client 
and the date, 
(b) Each client or designated representative shall 
be given a copy of the signed cost-sharing form 
and a copy shall be kept in the client's file. 

Statutory Authority G.S. 143B-153. 



.0305 SERVICE COST-SHARING FORM 

(a) A service cost-sharing form must be com- 
pleted for all clients receiving services subject to 
cost-sharing. The form must contain the follow- 
ing: 

(1) the purpose of service cost-sharing; 

(2) space to list the service or services 
received; 

(3) space to indicate the cost (actual cost or 
fixed rate per unit) of the service or 
services to be received; actual cost will 
typically be an estimated cost based on 
the previous year's date for steff time 
and related expenses for rendering 
services subject to cost-sharing; fixed 
rate per unit will be the specified con- 
tract rate when purchasing services; 

(4) information regarding what procedures 
the agency will use to request cost- 
sharing revenue and whom the client 
should contect if he has questions re- 
garding service cost-sharing collection 
procedures; 

(5) a stetement indicating that services will 
not be terminated for failure to share in 



8:15 



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November 1, 1993 



1384 



PROPOSED RULES 



.0306 SERVICE COST-SHARING SCHEDULE 

(a) The amount of cost-sharing to be requested from clients shall be in accordance with the following cost- 
sharing schedule: 



Monthly 
Income 



COST-SHARING SCHEDULE 



Size of Income Unit 



Minimum 

Percentage 

(Percentage of 

Service Cost) 



100% of 
Estab. Income 



1 
I 852-970 

971-1.090 
1.091-1.209 
1.210-1.328 
1.329-1.447 
1,448-above 



$1.149-1.301 

1.302-1.516 

1.517-1.600 

1.601-1.761 

1.762-1.952 

1,95 3 -above 



$1.446-1.648 
1.649-1.850 
1.851-2.053 
2.054-2.255 
2.256-2.458 
2,459-above 



30% 
40% 
50% 
60% 
75% 
100% 



100% of 
Estab. Income 



$1.744-1.987 
1.988-2.231 
2.232-2.475 
2.476-2.719 
2.720-2.963 
2,964-above 



$2.041-2.326 
2.327-2.612 
2,613-2.897 
2.898-3.183 
3.184-3.469 
3.470-above 



$2.339-2.665 
2.666-2.992 
2.993-3.320 
3.321-3.647 
3.648-3.975 
3.976-above 



30% 
40% 
50% 
60% 
75% 
100% 



100% of 
Estab. Income 



$2.636-3.004 
3.005-3.373 
3.374-3.743 
3.744-4.112 
4.113-4.481 
4.482-above 



8 

$2.934-3.343 
3.344-3.754 
3.755-4.165 
4.166-4.576 
4.577-4.986 
4,987-above 



$3.231-3.638 
3.684-4.135 
4.136-4.587 
4.588-5.040 
5.041-5.492 
5, 493 -above 



30% 
40% 
50% 
60% 
75% 
100% 



100% of 
Estab. Income 



10 
$3.529-4.022 
4.023-4.516 
4.517-5.010 
5.011-5.504 
5.505-5.998 
5,999-above 



11 

$4.826-4.361 
4.362-4.897 
4.898-5.432 
5.433-5.968 
5.969-6.504 
6, 505 -above 



12 

$4.124-4.700 
4.701-5.277 
5.278-5.856 
5.857-6.432 
6.433-7.009 
7,010-above 



30% 
40% 
50% 
60% 
75% 
100% 



Established Income (Estab. Income) as used in this 
Rule is defined in W NCAC 35E .0104. which is 
incorporated by reference, including subsequent 
amendments and editions; Income Unit as used in 
this Rule is defined in iO NCAC 35E .0103. 
which is incorporated by reference, including 
subsequent amendments and editions. Copies of 
these Rules may be obtained from the Office of 
Administrative Hearings. Post Office Drawer 
27447. Raleigh. N.C. 27611-7447. (919) 733- 
2678. at a cost of two dollars and fifty cents 
($2.50) for up to ten pages and fifteen cents ($.15) 
for each additional page at the time of adoption of 



this Rule . 

(h) Agencies must establish a cost-sharing 
schedule for clients whose gross monthly income 
is less than the established income as defined in 10 
NCAC 35E .0104. which is incorporated by 
reference, including subsequent amendments and 
editions. Copies of these Rules may be obtained 
from the Office of Administrative Hearings. Post 
Office Drawer 27447. Raleigh. NC 27611-7447. 
(919) 733-2678. at a cost of two dollars and fifty 
cents ($2.50) for up to 10 pages and fifteen cents 
($.15) for each additional page at tlie time of 
adoption of this Rule. In developing this schedule. 



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November 1, 1993 



PROPOSED RULES 



agencies may establish percentages of the cost of 
the service or an amount that will be requested 
from clients. 

(c) Agencies must distribute a copy of the cost- 
sharing schedule to all clients receiving services 
subject to cost-sharing as defined in Rule .0301 of 
this Section. The cost-sharing schedule must 
reflect the income ranges and minimum percentag- 
es outlined in Paragraph (a) of this Rule. 

(d) Agencies may negotiate higher service cost- 
sharing percentages or lower service cost-sharing 
percentages than those outlined in Paragraph (a) of 
this Rule, based on individual client circumstances. 
The client will determine the amount of service 
cost-sharing he will pay based upon his individual 
financial circumstances. 



collected. 

Statutory Authority G.S. 143B-153. 

.0308 TERMINATION OF SERVICES 
FOR FAILURE TO SHARE 

Services to the client will not be terminated for 
failure to share in the cost of services rendered. 

Statutory Authority G.S. 143B-153. 

CHAPTER 41 - CHILDREN'S 
SERVICES 

SUBCHAPTER 41F - LICENSING 
OF FAMILY FOSTER HOMES 



Statutory Authority G.S. 143B-153. 

.0307 COLLECTION OF COST-SHARING 
REVENUE 

(a) Agencies must establish policies and proce- 
dures governing the collection of cost-sharing 
revenue at least quarterly. 

(b) Agencies must document that efforts have 
been made to collect cost-sharing revenue at least 
quarterly from those clients who have agreed to 
share in the cost of services. This includes asking 
the client at least quarterly to share in the cost of 
services subject to cost sharing. 

(c) When the county department of social servic- 
es directly provides a service subject to cost- 
sharing, the county department of social services 
must be responsible for collecting and accounting 
for cost-sharing revenues. 

(d) When a service subject to cost-sharing is 
provided by another agency or individual through 
a purchase of service contract, that provider or the 
county department of social services must be 
responsible for collecting and accounting for cost- 
sharing revenue. When the provider is responsible 
for collecting and accounting for cost-sharing 
revenue this must be specified in the contract for 
purchase of services. 

(e) When a service subject to cost-sharing is 
purchased through a local or state- level contract, 
the provider must be furnished current information 
in writing, via the Services Information System 
Client Entry Form (DSS-5027), as to the amount 
of the cost-sharing the client has agreed to pay. 
This amount is to be collected from the client. 
Any change in the amount of cost-sharing must be 
transmitted to the provider via a revised DSS- 
5027. No cost-sharing amounts other than those 
identified on the most current DSS-5027 may be 



SECTION .0700 - STANDARDS 
FOR LICENSING 

.0704 PHYSICAL FACILITY 

(a) Fire and Building Safety. 

(1) All homes must meet the N. C. Uni- 
form Residential Building Code regula- 
tions. Volume h — B7 VII. which is 
adopted by reference including all 
subsequent amendments and editions. 
Copies of the Code may be obtained 
from the North Carolina Department of 
Insurance, Code Council Section, Post 
Office Box 26387, Raleigh. North 
Carolina. 27611. (919) 733-3901. at a 
cost of twenty-five dollars ($25.00) at 
the time of adoption of this Rule. 

(2) All homes shall be reasonably protected 
from all fire hazards. 

(A) All exits (i.e., doors, hallways, and 
stairs) shall be clear and ready for 
use; 

(B) an evacuation plan shall be developed, 
and all persons in the home shall be 
knowledgeable of the plan; 

(C) all homes shall have sufficient smoke 
detectors and fire extinguishes; 

(D) all homes shall have a telephone. 

(3) Before a home is fully licensed, and 
annually thereafter, it must be inspected 
and receive a satisfactory rating on the 
fire and building safety inspection 
report completed by one of the follow- 
ing: 

(A) county building inspector; 

(B) local fire department official. 

(b) Health Regulations. 

(1) All homes must meet the minimum 



8:15 



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November I, 1993 



1386 



PROPOSED RULES 



sanitation standards for a residential 
care facility as set forth by the North 
Carolina Health Services Commission 
and codified in 10 NCAC lOA .0200. 
15A NCAC 18A .1600 which is adopt- 
ed by reference including all subsequent 
amendments and editions. Copies of 
this Rule may be obtained from the 
Office of Administrative Hearings 
(OAH) Post Office Drawer 27447. 
Raleigh, NC 27611-7447, (919) 733- 
2678. at a cost of two dollars and fifty 
cents ($2.50) for ug to ten pages and 
fifteen cents ($0.15) for each additional 
page at the time of adoption of this 
Rule. 
(2) Before a home not on public water and 
sewer systems, is fully licensed, and 
annually thereafter, it must be inspected 
by the county sanitarian and receive a 
satisfactory rating on the inspection 
form for residential care facilities. 
(c) Environmental Regulations. 

(1) The home and yard shall be maintained 
and repaired so that they do not appear 
to be hazardous to the children in care. 

(2) The house shall be kept free of rodents 
and insects and the grounds free of 
stray animals. 
Outdoor areas shall be well-drained. 



£3} 

£4} 

15] 



Windows and doors used for ventilation 
shall be screened. 

The kitchen shall be equipped with a 
working stove and refrigerator, and 
adequate eating, cooking and drinking 
utensils which are properly handled and 
stored. 

Household equipment and furniture 
shall be in good repair. 
Inflammable and poisonous substances, 
medications and cleaning materials shall 
be stored out of the reach of young 
children. 

Explosive materials, firearms and pro- 
jectiles used such as darts, arrows and 
BB's shall be stored out of the reach of 
all children. 



16} 

01 

18) 

19} 

(10) 

rabies and documentation shall be main- 
tained by the foster parent. 
(ed) Room Arrangements. 

(1) Family Room. Each home shall have a 
iamily room which shall be large 



Ammunition and firearms shall be 
stored in separate locked places. 
Household pets shall be vaccinated for 



enough to meet the needs of the family 
including foster children. 

(2) Kitchen and Dining Area. The kitchen 
shall be large enough for preparation of 
food and cleaning of dishes. The din- 
ing area shall be large enough to seat 
all members of the family including 
foster children. 

(3) Bedrooms. Bedrooms shall be clearly 
identified as bedrooms and shall not 
serve dual functions: 

(A) Space. Bedrooms can be shared only 
as long as a minimum of 40 square 
feet is provided for each child exclud- 
ing closet space. Exception to this 
standard will be allowed for those 
homes in which children were living 
prior to July 1. 1983. No additional 
children may be placed in the foster 
home until the space standard is met. 

(B) Sleeping Arrangements: 

(i) No child two years of age or 
older shall share a bedroom with 
an adult except under special 
circumstances and with prior 
approval from Children's Services 
Branch, Foster Care Services. 

(ii) Each child shall have his own bed 
except: 

(I) siblings of same sex may share 
a double bed; 

(II) two children of the same sex 
and near the same age may at 
the discretion of the foster 
parents and supervising agency 
share a double bed, but only if 
the children so desire. 

(iii) Each bed shall be provided with a 
comfortable mattress, proper 
support, suitable bed coverings, 
and be adequate to accommodate 
the child. 

(iv) No day bed, convertible sofa, or 
other bedding of a temporary 
nature shall be used except for 
temporary care of up to two 
weeks. 

(v) Sleeping room shall not be shared 
by children of opposite sex. If 
exceptions are necessary, these 
should be only for children age 
five and under. 

(vi) Except for infents, sleeping ar- 
rangements should be such that 
space is provided within the sleep- 



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November 1, 1993 



PROPOSED RULES 



ing room for the child's personal 
possessions and for a reasonable 
degree of privacy, 
(vii) Shared bedrooms should take into 
consideration ages of children. It 
is recommended that a child under 
six should not share a room with 
a child over 12. No more than 4 
children shall share a room. 
(C) Storage. Separate and accessible 
drawer space for personal belongings 
and sufficient closet space for indoor 
and outdoor clothing shall be avail- 
able for each child. 
(B4) Bathrooms. There shall be adequate 
toilet and bathing facilities. 

Statutory Authority G.S. 131D-10.5; 143B-153. 

CHAPTER 42 - INDIVIDUAL 
AND FAMILY SUPPORT 

SUBCHAPTER 42A - ADULT 
PLACEMENT SERVICES 

SECTION .0300 - FOSTER CARE 
SERVICES FOR ADULTS 

.0308 PLANNING FOR PLACEMENT 
INTO DOMICILIARY HOMES 

fa) — Social workers in the county departments of 
social services arc responsible for assisting Individ 
uals and their families who need and want this 
service, which consists of locating a domiciliary 
home — with — the — accommodations, — services — and 
charges suitable to their needs. — The s tate divi s ion 
and county departments of social services arc not 
allowed to make referrals to or participate in plans 
for placing individuals in domiciliary homes which 
do not sign the Civil Rights Statement of Compli 
ance (Form DSS 1 4 6 4 ) as required by the Civil 
Rights Act of 196 4 . 

(b) When it is determined that placement into a 
domiciliary home is the only solution, placement 
planning must begin. — This must include: 

fB accepting — and — respecting — the — adult 

client's right to decide on and choose 

domiciliary home placement. If his 

survival is threatened and he is incapa 
blc of making a rational choice, protcc 
tivc s ervices may be necessary. — See 
Section 6500 of Volume V of the Fami 
ly Services Manual for policies related 
to protective services; 
fS) involving the older person and those 



close to him in placement planning; 

f^) assisting in the selection of a home 

which will best suit his needs; 

{4) purpHDseful, guided assi s tance in effect 

ing the change to a new setting; 

f§) supporting the individual during and 

after placement through the period of 
adjustment to his new setting; 

f6) planning with the client, when feasible, 

to return home. 
fe) — As a part of placement planning it i s essen 
tial that the client's ambulation capacity, diagnosis 
and medications be evaluated and prescribed by his 
physician and documented on the FL 2 or MR 2 
prior to placement in licensed domiciliary home s . 
fd) — Service workers work closely with medical 
personnel to s ec that the appropriate Icind of care 
i s s ecured and that the physician is informed of the 
definition of ambulation capacity and requested to 
note the ambulation — capacity — on the FL 2 or 
MR 2. 

{e) — When placement is made in a domiciliary 
home, form FL 2 or MR 2 is to be completed in 
duplicate and routed as follows: 

{\^ original in client case record, 

(3) copy to the licensed home. 

(f) A current FL 2 or MR 2 must be completed 

every 12 months or more often if needed with the 

ambulation capacity always noted by the physician. 

(g) — When the re s ident enters the domiciliary 

home, the following steps shall be completed: 

H) The DSS 1865. Resident Register, must 

be completed; 

(3) At the time of admi ss ion the new resi 

dent, or his personal representative or 
responsible — relative — should — clearly 
understand and agree on the services 
which arc provided by the home, plans 
fef= — payment — for these — services — and 
personal money that is available to him. 
The policie s of the home must be in 
writing. 

0) When the individual i s admitted to the 

licensed domiciliary home the writt e n 
policies of the home regarding refunds 
to the re s ident for absences from the 
home, moving from the home or death 
must be clearly stated. 

f4) Plans are made with the new resident 

and his family or other repr e sentative 
for his health care. 

f§) Plans arc also made for sufficient cloth 

ing and the care of his — clothing to 
assure that the resident is always well 
groomed. 



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1388 



PROPOSED RULES 



Statutory Authority G.S. 143B-153. 

.0309 COUNTY FILES FOR RESIDENTS 

(a) There must be a county' file on each resident 
in Q group home who has received or is receiving 
services under Title XX of the Social Security Act. 

(b) When the resident does not ' l ^tlDt scr i 'iccs or 
does not need services, the file may be closed. 
The one exception to this is when county depart 
mcnt of social services staff has been appointed 
guardian for a resident who has been adjudicated 
incompetent. — In this ease it is anticipated that the 
file would remain open for ser>'ices. 

fe) — The following forms and documentation are 
required to support claims for financial participa 
tion and must be in the recipient's file: 

f4-) FL 2 or MR 2 which verifies the need 

for domiciliary home care, 
^ ORy — correspondence — from — the — social 

worker to the resident or eorrcspon 

dence to the resident' s family or other 

agencies about the resident. 
0) ps]y'chologiealB — &f — social — evaluations 

about the resident. 
{4) social summaries from regional psychi 

atf4e — hospitals — or mental — retardation 

centers, and 
03 evidence of continued appropriateness 

of services. 

Statutory Authority G.S. 143B-153. 

SECTION .0600 - SERVICE 
REQUIREMENTS 

.0601 INTAKE AND SCREENING 

(a) The initial request or referral must be 
screened to determine whether the potential client 
appears to be in the target population codified in 
10 NCAC 35E .0322. which is incorporated by 
reference, including subsequent amendments and 
editions. Copies of this Rule may be obtained 
from the Office of Administrative Hearings. Post 
Office Drawer 27447. Raleigh. NC 27611-7447. 
(919) 733-2678. at a cost of t.wo dollars and fifty 
cents ($2.50) for up to ten pages and fifteen cents 
($.15) for each additional page at the time of the 
adoption of this Rule. Documentation must reflect 
how the criteria in the target population were 
determined to be met. 



(b) When Adult Placement Services are request- 
ed, an application must be made in accordance 
with 10 NCAC 35D .0200. which is incorporated 
by reference, including subsequent amendments 
and editions. Copies of this Rule may be obtained 



from the Office of Administrative Hearings. Post 
Office Drawer 27447. Raleigh. NC 27611-7447. 
(919) 733-2678. at a cost of t.wo dollars and fifty 
cents ($2.50) for up to ten pages and fifteen cents 
($.15) for each additional page at the time of the 
adoption of this Rule. An application is not 
required when the only services provided are 
information regarding placement options and 
procedures, referral to a more appropriate re- 
source, or consultation with another sers'ice pro- 
vider. 

(c) If an application for Adult Placement Servic- 
es has been made by a responsible party for an 
individual who then refuses these services, this 
refusal must be honored. The social worker must 
offer other services and accept an application or 
make a referral for other services as requested by 
the client. If. however. Adult Placement Services 
or other services are authorized by one of the 
following legal surrogate decision-makers or by a 
court order, the service will be provided as re- 
quested: 

(1) a legally appointed guardian of the 
person or general guardian; 

(2) an attorney-in-fact appointed in a dura- 
ble Power of Attorney, which grants 
relevant duties and is in effect; or 

(3) a health care agent appointed in a 
Health Care Power of Attorney, which 
grants relevant duties and is m eff'ect. 

If there is reasonable cause to believe during the 
intake and screening, assessment, service planning 
or provision of any services that the individual is 
an abused, neglected or exploited disabled adult in 
need of protective services, an Adult Protective 
Services referral must be made. If there are 
indications that the individual may be incompetent 
as defined in G.S. 35 A- 1 101(7) and needs a 
guardian to facilitate the provision of services, a 
social worker will explore options with the referral 
source, family members or within the agency for 
facilitating incompetency proceedings and the 
appointment of a guardian. 

Statutory Authority G.S. 143B-153. 

.0602 ASSESSMENT AND SUPPORTIVE 
COUNSELEVG 

(a) A thorough assessment must be conducted of 
the client's situation, including strengths and 
limitations in the following areas: 

(1) physical health; 

(2) mental health; 

(3) social system; 

(4) activities of daily living and instrumen- 



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PROPOSED RULES 



tal activities of daily living; 

(5) economic and financial circumstances; 
and 

(6) environment. 

(b) With the exception of the circumstances 
listed below the client must be seen personally by 
the social worker as many times as is necessary to 
do a thorough assessment in the six areas, but a 
minimum of one time. The personal contact may 
be in a setting other than the client's home, if the 
client or others can provide the necessary informa- 
tion for an assessment of the client's living envi- 
ronment, and, if during the course of the assess- 
ment, it does not appear that in-home services will 
be needed or appropriate as an alternative to 
placement or as an interim service plan. 

(c) For the following situations, an assessment 
must be done as thoroughly as possible with 
information and resources available to the social 
worker, without requiring personal contact with 
the client to complete the assessment. 

(1) a client who is not currently living in 
the county in which the application is 
made; 

£2} a client who is in an emergency situa- 
tion, where a placement is needed 
quickly and personal contact would be 
a barrier to achieving a quick place- 
ment: 

(3) a client whose case is being transferred 
from one social worker to another 
within the agency, and an original 
assessment which addresses all six 
functional areas is available. This 
assessment must be updated to reflect 
current information; 

(4) a client who is already in a facility and 
is requesting Adult Placement Services, 
and an original assessment which ad- 
dresses all six functional areas is avail- 
able. This assessment must be updated 
to reflect current information. 

£cQ Documentetion must reflect the reason the 
client was not seen personally in conducting the 
assessment. 

Statutory Authority G. S. 143B-153. 

.0603 SERVICE PLAN>fING 

A service plan must be developed which address- 
es problems identified during the assessment and 
which takes into account client and family 
strengths and goals. The client must be involved 
in the service planning process as much as he Is 
capable of doing so. The service plan must docu- 



ment activities to meet goals. 
Statutory Authority G.S. 143B-153. 

.0604 PRE-PLACEMENT PROCEDURES 

(a) The county department of social services is 
responsible for facilitating the completion and 
prior approval of FL-2, MR-2 and Pre-Admission 
Screening and Annual Resident Review (PASARR) 
Level I screening forms for clients receiving Adult 
Placement Services by following procedures 
codified in \0 NCAC 42C .2402, 10 NCAC 26A 
.0002, 10 NCAC 26B .0108 and .0114, 10 NCAC 
26F .0001 and .0002, and the regulations for Pre- 
Admission Screening and Annual Resident Review 
from the Omnibus Budget Reconciliation Acts 
(OBRA) of 1987 and 1990 published in the Federal 
Register, Volume 57, No. 230, pages 56450- 
56514. November 30. 1992. 10 NCAC 42C 
.2402, 26A .0002, 263 .0108 and .0114, 26F 
.0001 and .0002 are incorporated by reference, 
including subsequent amendments and editions. 
Copies of these Rules may be obtained from the 
Office of Administrative Hearings, Post Office 
Drawer 27447, Raleigh, NC 27611-7447. (919) 
733-2678, at a cost of two dollars and fifty cents 
($2.50) for up to ten pages and fifteen cents ($.15) 
for each additional page at the time of the adoption 
of this Rule. Copies of pages 56450-56514 of 
Volume 57, No. 230 of the Federal Register may 



be obtained from the Planning and Information 
Section, NC Division of Social Services, 325 N. 
Salisbury Street, Raleigh, NC 27603-5905, (919) 
733-4530, at a cost often cents ($.10) per page at 
the time of adoption of this Rule. 

{b} The facilitation of FL-2, MR-2 and 
PASARR form completion can be accomplished by 
informing the client, family or other representative 
of procedures for getting the forms completed and 
following up to see that the procedures are 
followed. If the client is not able to follow the 
procedures and has no family or representative 
able or willing to do so, the social worker must 
work more directly with the physician or other 
health care provider to get the form(s) completed. 
This includes assisting the client in locating 
resources for completion of the form, including 
transportation and a physician. 

(c) A Consent for the Release of Information 
must be obtained for every client who js receiving 
Adult Placement Services. The consent must be 
obtained according to rules codified in _10 NCAC 
24B, which are incorporated by reference, 
including subsequent amendments and editions. 
Copies of these Rules may be obtained from the 



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November 1, 1993 



1390 



PROPOSED RULES 



Office of Administrative Hearings, Post Office 
Drawer 27447, Raleigh, NC 27611-7447, (919) 
733-2678, at a cost of two dollars and fifty cents 
($2.50) for up to ten pages and fifteen cents ($.15) 
for each additional page at the time of the adoption 
of this Rule. 

(d) Social work staff" must inlfarm applicants for 
Adult Placement Services of the availability of 
State/County Special Assistance for Adults or 
Medicaid to cover the cost of care in a facility, 
and the procedures for making an application if 
they are interested and have not already applied. 

(e) Local agency procedures must be established 
to assure that FL-2, MR-2, and PASARR (Level 
I screening or notice of final determination) forms 
are shared among income maintenance and social 
work staff when they have mutual clients. 

(f) The social worker must coordinate with 
income maintenance staff' regarding the eligibility 
of clients receiving Adult Placement Services, and 
must assist the client, family or representative in 
following procedures to establish eligibility for 
income maintenance programs as needed to 
facilitate placement or other services. 

Statutory Authority G. S. 143B-153. 

.0605 LOCATING A BED AND 
SECURING PLACEMENT 

(a) Social workers in the county departments of 
social services are responsible for assisting clients 
who are receiving Adult Placement Services and 
their families or representatives to locate available 
beds in substitute homes, residential health care 
facilities, or independent housing in the community 
with services and charges suitable to their needs. 
County departments are not allowed to make 
referrals to or participate in plans for placing 
individuals in domiciliary homes, nursing facilities, 
or any other facility placement arrangements which 
do not comply with the Civil Rights Act of 1964, 
or to provide Adult Placement Services to 
individuals residing in those homes or facilities. 

(b) When an available and appropriate placement 
for a client has been located, the social worker 
will assist the client and his family or 
representative in planning for and facilitating the 
admissions process. If the client, family or 
representative is not able or willing to follow 
admissions procedures, the social worker will 
provide more direct assistance as needed to 
facilitate the placement. 

(c) The social worker must coordinate with 
income maintenance stafF £if applicable) to assure 
that eligibility for State/County Special Assistance 



for Adults or Medicaid is established, assure that 
there is an understanding between the facility and 
client about how payment will be made, or assist 
the client in making alternate arrangements prior 
to the date of placement. 

Statutory Authority G.S. 143B-153. 

.0606 POST-PLACEMENT ADJUSTMENT 

(a) County departments of social services are 
res ponsible for providing or facilitating services to 
assist clients receiving Adult Placement Services to 
adjust to their placements or independent settings. 
This includes clients for whom the county depart- 
ment has facilifated placement arrangements as 
well as clients already living in facilities who 
request or are referred for services. 

(b) Adjustment services include psychosocial 
adjustment as well as assuring that supportive 
services and financial arrangements are in place. 

(c) These services may be facilitated by assuring 
that another agency, facility stelT member, family 
member or other representative is assisting the 
client with adjustment. If another agency, facility 
stefl" member, family member or representative is 
not assisting the client, the social worker will 
provide these services until a satisfactory adjust- 
ment has been made or until alternate services are 
in place for the client. The county department 
must provide or facilitate adjustment services a 
minimum of 30 days after the client's admission or 
relocation to a facility or other living arrangement. 

Statutory Authority G.S. 143B-153. 

.0607 TERMINATION OF ADULT 
PLACEMENT SERVICES 

(a) Prior to Adult Placement Services being 
terminated, the social worker must review avail- 
able information and make contacts with signifi- 
cant persons to determine whether services need to 
be continued, and to reach closure with the client 
and involved parties. If there are no identifiable 
client needs that can be addressed by the agency, 
or those needs are being met by another party. 
Adult Placement Services may be terminated in 



accordance with policies codified in W NCAC 
35D .0300. which is incorporated by reference, 
including subsequent amendments and editions. 
Copies of this Rule may be obtained from the 
Office of Administrative Hearings, Post Office 
Drawer 27447. Raleigh. NC 27611-7447. (919) 
733-2678, at a cost of two dollars and fifty cents 



($2.50) for up to ten pages and fifteen cents ($.15) 
for each additional page at the time of the adoption 



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November 1, 1993 



PROPOSED RULES 



of this Rule. If Adult Placement Services have 
been ordered by the court under Adult Protective 
Services, services will terminate when the order 
expires. 

(b) Contacts may be made in person, by tele- 
phone, or by letter but must allow for sufficient 
information to be obtained to make a determination 
about the need for services. 

("c) Documentation must reflect the contacts 
which were made to make the determination. 

Statutory Authority G.S. 143B-153. 

.0608 COORDINATION WITH OTHER 
SERVICE PROVIDERS 

Documentation in the client's case record must 
include information about other agencies or service 
providers who are known to be involved with the 
client. If any of those parties are involved in 
placement, adjustment, or relocation services with 
the client, documentation must reflect how these 
services are being coordinated so as not to dupli- 
cate efForts. If the placement social worker in the 
department of social services is the most appropri- 
ate or only source of assistance, and the client 
meets the criteria in the target population in 10 
NCAC 35E .0322, an application must be made in 
accordance with 10 NCAC 35D .0200 and Adult 
Placement Services provided. 10 NCAC 35E 
.0322 and 10 NCAC 35D .0200 are incorporated 
by reference, including subsequent amendments 
and editions. Copies of these Rules may be 



obtained from the Office of Administrative Hear- 



ings, Post Office Drawer 27447, Raleigh, NC 
27611-7447, (919) 733-2678. at a cost of two 
dollars and fifty cents ($2.50) for up to ten pages 
and fifteen cents ($. 15) for each additional page at 
the time of the adoption of this Rule. 

Statutory Authority G.S. 143B-153. 

SUBCHAPTER 42J - HEALTH 
SUPPORT SERVICES 

.0003 SCOPE OF SERVICES 

Health support services are casework services 
designed to motivate individuals and families to 
utilize information and resources which will 
promote and preserve their optimum level of 
health thus increasing their potential to be happy 
and productive citizens: 
(1) Helping individuals and families to recog- 
nize health needs includes the provision 
of counseling, individual or group in- 
struction and educational materials fo- 



cused on the following: 

(a) basic health needs such as nutrition, 
exercise, rest, cleanliness, regular 
physical examinations, necessary immu- 
nizations, perinatal care, maternal and 
child health, and family planning; 

(b) noticeable physical problems or devel- 
opmental disabilities such as speech 
impediments, crossed eyes, hearing 
difficulties, orthopedic irregularities, 
disfiguring scars or birth marks, skin 
allergies, dental cares, need for dental 
plates or braces, obesity, cerebral pal- 
sy, muscular dystrophy, ete.; 

(c) identifiable mental health related prob- 
lems, such as mental retardation, men- 
tal illness, emotional disturbance, alco- 
hol or drug abuse; 

(d) suspected chronic disease such as ar- 
thritis, emphysema, heart disease, 
kidney disease, diabetes, cancer, etc.; 

(e) communicable disease such as tubercu- 
losis, measles, mumps, polio, venereal 
diseases, etc.; 

(f) physical and occupational therapy; 

(2) Helping individuals and families secure 
needed health services includes the fol- 
lowing: 

(a) referring them to appropriate resources 
for services and treatment to meet their 
individual needs; 

(b) providing help, as needed, with apply- 
ing for assistance with the costs of 
medical and health care; 

(c) arranging for supportive services such 
as transportation and child care to 
enable them to utilize available resourc- 
es for diagnosis and treatment; 

(3) Counseling and planning with individu- 
als, families and health providers to 
assure continuity of treatment and carry- 
ing out of health recommendation in- 
cludes the following; 

(a) counseling with individuals and families 
as needed, about accepting and adjust- 
ing to health limitations; 

(b) counseling with individuals and families 
regarding the importance of adhering to 
prescribed treatment plans by following 
doctors' orders and meeting all appoint- 
ments for check-ups. treatment and 
therapy; 

(c) help to individuals and families in 
scheduling appointments for continued 
treatment and services and in arranging 



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1392 



PROPOSED RULES 



for supportive services to enable them 
to keep scheduled appointments; 

(d) assistance as needed in having prescrip- 
tions for medication filled and refilled 
including exploration of resources 
available to help with the cost of medi- 
cation; 

(e) assistance in locating and utilizing 
ancillary services to support the health 
plan such as chore acrvioes, homcmakcr 
in-home aide services, day care, prepa- 
ration and delivery of meals, services to 
meet the special needs of the elderly, 
disabled or handicapped, transportation, 
etc.; 

(f) coordinated planning with health pro- 
viders to identify needs, locate resourc- 
es and develop strategies for motivating 
the individual and his family to carry 
out health recommendations; 

(g) follow-up periodically with the individ- 
ual and his family to assess progress 
toward reaching service goals and the 
need for continued health support ser- 
vices; 

(4) Helping individuals to secure admission 
to medical institutions and children to 
secure admission to other health facilities 
includes the following: 

(a) counseling with the individual and his 
family to help them accept the need for 
the recommended level of care and to 
work through any negative feelings they 
may have about such a move; 

(b) assistance in locating appropriate re- 
sources and applying for admission; 

(c) help in exploring resources available 
for assistance with the cost of care; 

(d) arranging for supportive services such 
as appliances, equipment, supplies, 
transportation, etc.; 

(e) follow-up after admission and continua- 
tion of health support services as need- 
ed. 

Statutory Authority G.S. 143B-153. 

SUBCHAPTER 42Q - STATE 
EV-HOME SERVICES FUND 

.0014 COST-SHARING 

Fees Cost-sharing requirements for the following 
services provided under the State In-Home Servic- 
es Fund shall be determined in accordance with 
policies governing fees for sorvicca. service cost- 



sharing codified in 10 NCAC 35F^ which is incor- 
porated by reference, including subsequent amend- 
ments and editions : day care services for adults, 
in-home aide services, preparation and delivery of 
meals and housing and home improvement fe- 
aourcc — items — only, (renovations or repair and 
furnishing or appliance purchases only). Copies of 
these Rules may be obtained from the Office of 
Administrative Hearings. Post Office Drawer 
27447. Raleigh. NC 27611-7447.(919)733-2678. 
at a cost of two dollars and fifty cents ($2.50) for 
up to ten pages and fifteen cents ($.15) for each 
additional page at the time of adoption of this 
Rule. 

Statutory Authority G.S. 143B-153. 

SUBCHAPTER 42R - ADULT 
DAY CARE - STATE FUND 

SECTION .0200 - STATE 
ADULT DAY CARE FUND 

.0204 COST-SHARING 

Fees Cost-Sharing Requirements for day care 
services for adults provided under the state adult 
day care fund shall be determined in accordance 
with policies governing foes for scrv'ioca service 
cost-sharing , codified in 10 NCAC 35Fj which is 
incorporated by reference, including subsequent 
amendments and editions. Copies of these Rules 
may be obtained from the Office of Administrative 
Hearings. Post Office Drawer 27447. Raleigh. NC 
27611-7447. (919) 733-2678. at a cost of two 
dollars and fifty cents ($2.50) for up to ten pages 
and fifteen cents ($.15) for each additional page at 
the time of the adoption of this Rule. 

Statutory Authority G.S. 143B-153. 

CHAPTER 46 - DAY 
CARE RULES 

SUBCHAPTER 46G - NONREGISTERED 
DAY CARE HOME REQUIREMENTS 

SECTION .0200 - REQUIREMEP^ FOR 
NONREGISTERED DAY CARE HOMES 

.0214 HEALTH AND SAFETY 
STANDARDS 

Each nonregistered day care home shall comply 
with the following requirements in order to main- 
tain a safe, healthy and sanitary environment for 
children: 



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PROPOSED RULES 



I 



I 



I 



(1) A health and emergency information 
form completed and signed by the child's 
parents or guardian shall be on file for 
each child who attends. The completed 
form must be on file on the first day the 
child attends with the exception of the 
child's immunization record which must 
be completed within 30 days after the 
first day the child attends. A recom- 
mended form is available from the sec- 
tion. However, the provider may use 
another form provided that form includes 
the following information: 

(a) the child's name, address, and date of 
birth; 

(b) the names of individuals to whom the 
child may be released; 

(c) the general status of the child's health; 

(d) any allergies or restrictions on the 
child's participation in activities with 
specific instructions from the child's 
parent or health professional; 

(e) the names and phone numbers of per- 
sons to be contacted in an emergency 
situation; 

(f) the name and phone number of the 
child's health provider and preferred 
hospital; 

(g) authorization for the provider to admin- 
ister specified medication according to 
the parent's instructions, if the parent 
so desires; 

(h) authorization for the provider to seek 
emergency medical care in the parent's 
absence; 

(i) a record of the child's immunizations as 
required pursuant to G.S. 130A-152. 

(2) The parent and provider must discuss and 
agree upon the methods of discipline to 
be used with each child. Corpoml pun - 
i s hment shall be admini s tered only with 
the written consent of the parent. The 
use of corporal punishment is prohibited 
except as stipulated in G.S. 1 10-101.1. 

(3) All areas used by the children, indoors 
and outdoors, shall be kept clean and 
orderly and free of items which are haz- 
ardous to children. 

(4) First-aid supplies shall be kept in a place 
easily accessible to the provider but out 
of the reach of children. 

(5) A working telephone shall be proximate 
to the day care home arrangement. A 
written plan shall be developed that 
describes how the provider will access 



emergency assistance. Emergency phone 
numbers shall be readily available. 

(6) To assure the safety of children whenever 
they are transported, the provider, or any 
other transportation provider, shall com- 
ply with all applicable state and federal 
laws concerning the transportation of 
passengers. All children regardless of 
age or location in the vehicle shall be 
restrained by individual seat belts or child 
restraint devices. 

(7) Garbage shall be stored in waterproof 
containers with tight fitting covers. 

(8) The provider shall have sanitary toileting 
facilities, and sanitary diaper changing 
and handwashing facilities. 

(9) Soiled diapers shall be placed in a cov- 
ered leak-proof container which is emp- 
tied and cleaned frequently. 

(10) The provider shall wash her hands after 
toileting and after diapering each child. 

(11) The provider shall complete and keep on 
file the health self-questionnaire form 
provided by the section Division . 

(12) Each provider shall obtain written proof 
that she is free of active tuberculosis 
prior to initial approval and every two 
years thereafter. 

(13) The provider shall serve nutritious meals 
and snacks appropriate in amount and 
type of foods served for the ages of 
children in care. 

(14) The provider shall provide daily opportu- 
nities for supervised outdoor play or 
fresh air, weather permitting. 

(15) The provider shall assure that the struc- 
ture in which the day care arrangement is 
located has clean drinking water, an 
approved sanitary disposal system, weath- 
er-tight construction, and is otherwise 
safe for human habitation. 

(16) Fuel burning heaters used when the 
children are in care shall be properly 
vented to the outside. Fuel burning 
heaters, fireplaces, stoves, and portable 
electric heaters, when in use, shall have 
a securely attached guard. 

(17) A battery-operated smoke detector shall 
be installed in the primary caregiving 
area of each nonregistered day care 
home. 

(18) The provider shall successfully complete 
a basic multimedia first aid course within 
three months of beginning participation in 
this program. 



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1394 



PROPOSED RULES 



Statutory Authority G.S. 143B-153(2a). 

SUBCHAPTER 46H - POLICIES FOR 

PROVISION OF CHILD DAY 

CARE SERVICES 

SECTION .0100 - GENERAL 
POLICIES 

.0104 TARGET POPULATIONS 

(a) Mandated Target Population. Child day care 
s ervices must be provided when funds and care 
resources arc available to eligible children who 
need day core services to enable: 

f4-) their parents to seek or maintain em 

ployment; 

f3j them to remain in their own homes 

during the period in which they receive 
protective services for children; 

{^ their parents to participate in training 

leading to employment. 
fb) — Optional Target Population. — Child day care 
s ervices may be provided to eligible children who 
need day core services to enhance their social, 
emotional, or cognitive development but who are 
not included in one of the mandated population s . 

(a) Child day care services must be provided to 
eligible children, as defined in 10 NCAC 46H 
.0200. who are in one or more of the following 
target populations when funds and care resources 
are available: 



ill 



£21 



Children whose parents need child care 

support in order to seek or maintain 

employment. 

Children whose parents need child care 

support to attend school or job training 

activities as described in Rule .0105 of 

this Section. 



(3) Children who need child care assistance 
in order to remain in their own homes 
during the period in which they receive 
protective services for children. 

(4) Children who need child care assistance 
as defined by the local agency responsi- 
ble for determining client eligibility and 
who are in licensed foster care homes 
or for whom the county department of 
social services has custody. 

(b) Child day care services may be provided m 
the following circumstances: 

(I ) Children who are eligible according to 
the criteria defined in either Rule .0202 
or Rules .0203 and .0204 of this Sub- 
chapter whose emotional, cognitive, 
social or physical development \s de- 



layed or is at risk for delay. 
(2) Children who meet the eligibility crite- 
ria for Child Welfare Services funds as 
provided in the North Carolina Division 
of Social Services' Family Services 
Manual. Volume I^ Chapter II, and who 
need child care assistance as a support 
to the family preventive or reunification 
services described in the manual . 
(c") Notwithstanding other rules in this Chapter, 
child day care services may be provided to chil- 
dren in counties participating in the Early Child- 
hood Education and Development Initiatives 
Program authorized by Part lOB of Article 3 of 
Chapter 143B of the North Carolina General 
Statutes, provided that the child care services are 
included in the county's Early Childhood Educa- 
tion and Development Plan as approved by the 
Department of Human Resources. 

(d) When the availability of funding js less than 
the amount needed to serve all eligible children, 
the local agency responsible for determining child 
eligibility for subsidized child care services may 
establish the priority in which the target popula- 
tions identified in Paragraphs (a) through (c) of 
this Rule will be served. The order of priority 
shall be stated in writing and made available to 
applicants for child care assistance. 

Statutory Authority G.S. 143B-153. 

CHAPTER 47 - STATE\COUNTY 
SPECIAL ASSISTANCE 

SUBCHAPTER 47B - ELIGIBILITY 
DETERMINATION 

SECTION .0400 - ELIGIBILITY 
FACTORS 

.0404 RESER'VE 

(a) Eligibility Requirement. 
(1) To determine eligibility, the income 
maintenance caseworker shall count 
only resources that are currently avail- 
able to the applicant or recipient. For 
applications, only those resources that 
are available during any month prior to 
disposition are counted to determine 
eligibility for those months. A resource 
shall be considered available not only 
when it is actually available but also 
when the applicant or recipient has a 
legal interest in a resource and can 
make it available. 



1395 



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PROPOSED RULES 



I 



\ 



> 



(A) When a representative alleges that an 
applicant or recipient is mentally 
incompetent (and the allegation can be 
supported by a physician's statement) 
and does not have a legal representa- 
tive appointed to act in his behalf, the 
resources held solely by the applicant 
or recipient or held jointly shall be 
excluded in determining countable 
reserve provided the following two 
conditions are met: 

(i) the petition to have an applicant 
or recipient declared incompetent 
is filed with the court within 30 
calendar days from the date the 
applicant's or recipient's represen- 
tative is informed of the require- 
ment; and 

(ii) the petition to have a legal guard- 
ian appointed is filed with the 
court within 30 calendar days of 
the date the applicant's or 
recipient's representative is 
informed of the requirement. 

(B) The county department of social 
services shall petition the court for 
incompetency and appointment of a 
guardian if: 

(i) the applicant or recipient has no 

representative willing to act in his 

behalf or the representative or 

guardian refuses to take the 

required action. The county shall 

petition the court to have the 

applicant or recipient declared 

incompetent and to have a 

guardian appointed within 30 

calendar days from the date it 

learns of the representative's 

refusal; or 

(ii) the applicant's or recipient's 

representative fails to take the 

required action within 30 calendar 

days of the date he was informed 

of the requirement. The county 

shall within 1 5 calendar days from 

this date, petition the court to 

have the applicant or recipient 

declared incompetent and to have 

a legal guardian appointed. 

If the county department of social 

services is required to act under 

Subparagraph (B)(i) or (ii), t h e 

resources held solely by the applicant 

or recipient or held jointly shall be 



excluded in determining countable 
reserve. 

(C) When the court rules that the 
applicant or recipient is competent, 
his resources shall be counted 
beginning the first day of the month 
following the month he is declared 
competent. 

(D) When the court declares the applicant 
or recipient incompetent and appoints 
a guardian, the guardian must take 
appropriate action to dispose of or 
make exempt the resource within 30 
calendar days of his appointment. If 
he does not, the county department of 
social services shall determine if the 
guardian is acting appropriately under 
the terms of the guardianship. 

(E) If the guardian takes the appropriate 
action to dispose of or make exempt 
the resource, the resource shall be 
excluded until the clerk of court 
confirms the action taken by the 
guardian. The resource, if otherwise 
includible, shall be counted in reserve 
beginning the first day of the month 
following the month the action is 
confirmed by the clerk of court. 

(2) The maximum reserve allowance for a 
A special assistance applicant/recipient 
shall be allowed to re s erve rcsourocs in 
the — following — amounts: the same 
amount as the Medicaid-Aid to the 
Aged, Blind, and Disabled medically 
needy coverage group. The couple 
amount shall apply regardless of 
whether each spouse qualifies for 
Special Assistance in his own right. 
fA) — One thousand dollars ($1 ,000) for one 

person. 
fB) — One thousand one hundred dollar s 
($1,100) for a couple regardles s of 
whether — eaeh — s pouse — qualifies — fef 
Special Assistance in hi s own right. 
If the reserve level exceeds the amount 
allowed for the number in the budget 
unit, the case is ineligible, 
(b) Individuals Whose Reserve is Counted. 

(1) Unless the spouse is in another 
assistance unit, his reserve shall be 
counted unless the couple is separated 
or divorced. If the spouse is in another 
assistance unit, only the applicant or 
recipient's share shall be counted. 

(2) Jointly Owned Resources. 



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November 1, 1993 



1396 



PROPOSED RULES 



(A) If a budget unit member owns 
resources jointly with another public 
assistance recipient, his share shall be 
counted as an available resource. TTie 
resource shall be divided equally 
unless the owners have a signed 
agreement specifying division. 

(B) If a budget unit member owns 
resources jointly with a non-assistance 
recipient, and he can dispose of the 
resource without the consent of the 
other owner, his share shall be 
counted as an available resource. 

(C) If a budget unit member owns 
resources jointly with a non-assistance 
recipient, and he cannot dispose of the 
resource without the consent of the 
other owner it shall be determined 
whether the non-assistance recipient 
consents to the disposal of the 
resource. 

(i) If he consents, the budget unit 

member's share of the resource 

shall be counted, 
(ii) If he refuses, the budget unit 

member's share shall not be 

counted. 
(c) Group I - reserve items counted: 

(1) cash on hand; 

(2) the current balance of savings accounts; 

(3) that portion of a checking account other 
than the monthly income deposited to 
meet the family's needs; 

(4) cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value exceeds one 
thousand five hundred dollars ($1,500); 

(5) equity (tax value less encumbrances) in 
non-essential motor vehicles; 

(6) equity (tax value less encumbrances) in 
excess of one thousand dollars ($1,000) 
in an essential motor vehicle. TTie 
vehicle must be needed by a family 
member to: 

(A) obtain medical treatment, 

(B) obtain or retain employment, 

(C) transport handicapped family 
members as needed, or 

(D) go shopping; 

(7) stocks, bonds, mutual fund shares, 
certificates of deposit and other liquid 
assets; 

(8) promissory notes, if salable; 

(9) revocable trust funds (revocable means 
the budget unit member has access to 



the trust); 

(10) net proceeds from a business, including 
a farm, which has been discontinued; 
and 

(11) equity (tax value less encumbrances) in 
real property not used as a home or 
producing an income. 

(d) Group I - reserve items excluded: 

(1) personal effects and household goods; 

(2) personal property including but not 
limited to: 

(A) a mobile home used as a homesite; 

(B) a motorized mobile home; 

(C) boats and trailers; 

(D) campers; and 

(E) farm or business equipment; 

(3) equity (tax value less encumbrances) of 
one thousand dollars ($1,000) or less in 
an essential motor vehicle; 

(4) income producing property; Only that 
portion of the property which is used to 
produce an income shall be excluded; 
The property shall continue to be 
excluded when it produces no income 
because of fectors beyond the 
recipient's control; 

(5) term life insurance; 

(6) burial insurance and pre-paid burial 
contracts; 

(7) the cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value does not exceed 
one thousand five hundred dollars 
($1,500); 

(8) relocation assistance payments received 
under Title XX of the Uniform 
Relocation Assistance and Real 
Property Acquisition Policies Act of 
1970; 

(9) that portion of the monthly income 
deposited in a checking account to meet 
the family's needs; 

(10) real property used as a home when the 
recipient's personal belongings remain 
in the home and he continues to state 
his intent to return or his dependents 
live in the home; Limited to a house 
plus contiguous property with tax value 
of twelve thousand dollars ($12,000) or 
less; 

(11) life estate or remainder interests; 

(12) heir property; Heir property is a 
descendant's undivided interest in real 
property owned in common with other 
descendants; and 



1397 



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November 1, 1993 



PROPOSED RULES 



(13) value of burial plots, 
(e) Group II - reserve items counted: 

(1) cash on hand; 

(2) the current balance of savings accounts; 

(3) that portion of a checking account other 
than the monthly income deposited to 
meet the family's needs; 

(4) cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value exceeds one 
thousand five hundred dollars ($1,500); 

(5) tax value of non-essential personal 
property limited to: 

(A) tax value in excess of one thousand 
two hundred dollars ($1,200) in all 
motor vehicles except for Paragraph 
(f) of this Rule; 

(B) a mobile home not used as a home- 
site; 

(C) boats, boat trailers, and boat motors; 

(D) campers; 

(E) farm or business equipment which is 
not used to produce an income; and 

(F) motorized mobile homes; 

(6) tax value of income producing personal 
property when equity is in excess of six 
thousand dollars ($6,000); 

(7) tax value of income producing personal 
property which does not yield a net 
annual income of at least six percent of 
the property's equity; 

(8) tax value of income producing real 
property not used as a home when the 
equity is in excess of six thousand 
dollars ($6,000); 

(9) tax value of income producing real 
property not used as a home which does 
not yield a net annual income of at least 
six percent of the property's equity; 

(10) tax value of real property not used as a 
home [limited to house and contiguous 
land with tax value of twelve thousand 
dollars ($12,000) or less]; 

(11) stocks, bonds, mutual fund shares, 
certificates of deposit and other liquid 
assets; 

(12) promissory notes, if salable; 

(13) revocable trust funds (revocable means 
the budget unit member has access to 
the trust); 

(14) value of pre-paid revocable burial 
contracts; 

(15) net proceeds from a business, including 
a farm, which has been discontinued; 

(16) life estate interest, if salable; 



(17) remainder interest, if salable; and 

(18) amount of reverse mortgage remaining 
in the month following the month of 
receipt. 

(f) Group II - reserve items excluded: 

(1) personal effects and household goods; 

(2) mobile home used as a homesite; 

(3) one essential motor vehicle of any value 
which is: 

(A) specially equipped for use by a handi- 
capped individual; or 

(B) used to obtain medical treatment; or 

(C) used to obtain or retain employment; 

(4) tax value of one thousand two hundred 
dollars ($1,200) or less from the value 
of other motor vehicles; 

(5) income producing personal property 
when the equity does not exceed six 
thousand dollars ($6,000); 

(6) income producing property when the 
annual yield is at least six percent of 
the equity; 

(7) real property used as a home [limited to 
a house and contiguous land with tax 
value of twelve thousand dollars 
($12,000) or less]. The applicant or 
recipient must have a written statement 
from a physician indicating that he is to 
return home within six months from the 
date of entry into the facility or his 
spouse and/or dependent children 
remain in the home; 

(8) term life insurance; 

(9) burial insurance; 

(10) the cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value does not exceed 
one thousand five hundred dollars 
($1,500); 

(11) relocation assistance payments received 
under Title XX of the Uniform 
Relocation Assistance and Real 
Property Acquisition Policies Act of 
1970; 

(12) that portion of the monthly income that 
is deposited in a checking account to 
meet the femily's needs; 

(13) non-salable life estate; 

(14) non-salable remainder interest; 

(15) heir property (lieir property is a 
descendant's undivided interest in real 
property owned in common with other 
descendants); 

(16) value of burial plots; 

(17) irrevocable burial contract; and 



8:15 



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November 1, 1993 



1398 



PROPOSED RULES 



(18) reverse mortgages in the month of 
receipt, 
(g) Verification. Reserve items must be verified 
and documented in the applicant or recipient's case 
record. 

Statutory Authority G.S. 108A-41; 108A-46; 
143B-153. 

TITLE 11 - DEPARTMENT 
OF INSURANCE 

I\otice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Department of Insurance 
intends to amend rule cited as 11 NCAC 6 A . 0802. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on December 7, 1993 at the Dobbs Building, 
3rd Floor Hearing Room, 430 North Salisbury- 
Street, Raleigh, NC 27611. 

MXeason for Proposed Action: Establishes a 
continuing education course for surplus lines 
licensees and makes technical amendments. 

(comment Procedures: Written comments may be 
sent to George Bro\^Ti at P.O. Bo.x 26387, Raleigh, 
NC 27611. Oral presentations may be made at 
the public hearing. Anyone having questions 
should call George Brown at (919) 733-7487 or 
Ellen Sprenkel at (919) 733-4529. 

CHAPTER 6 - AGENT SERVICES 
DIVISION 

SUBCHAPTER 6A - AGENT SERVICES 
DIVISION 

SECTION .0800 - CONTINUING 
EDUCATION 

.0802 LICENSEE REQUIREMENTS 

(a) Life , acoident. and health licensees shall 
obtain 12 ICECs during each calendar year in 
approved life^ accid e nt, and health courses. 

(b) Fire and casualty Property and liability 
licensees shall obtain 12 ICECs during each 
calendar year in approved fir e and casualty proper- 
ty and liability courses. 



(c) Accident and health licensees shall obtain 12 
ICECs during each calendar year in approved 
accident and health courses. 

(d) Any person holding more than one license to 
which this Section applies shall obtain 18 ICECs 
during each calendar year, including a minimum of 
six ICECs for each kind of license. 

(e) An instructor shall receive the maximum 
ICECs awarded to a student for the course. 

(f) Licensees shall not receive ICECs for the 
same course more often than one time in any three 
calendar year period except when there are major 
revisions within the course. The Commissioner 
shall determine whether the revisions are substan- 
tial enough to qualify for additional ICECs within 
a three calendar year period. 

(g) Licensees do not have to obtain ICECs for 
the calendar year in which they are initially li- 
censed. 

(h) Licensees shall receive ICECs for a course 
only for the calendar year in which the course is 
completed. Any course requiring an examination 
shall not be considered completed until the licensee 
passes the examination. 

(i) Licensees shall not receive ICECs for courses 
completed prior to January 1, 1991. 

(j) Licensees shall maintain records of all ICECs 
for three years following the obtaining of such 
ICECs, which records shall be available for in- 
spection upon the Commissioner's request. 

(Tc) Nonresident licensees who meet continuing 
education requirements in their home states meet 
the continuing education requirements of this 
Section. Nonresident licensees whose home states 
have no continuing education requirements shall 
meet the requirements of this Section, except for 
the mandatory statute and rule update. 

(1) Licensees shall be required to complete only 
the mandatory statute and rule update prescribed in 
Paragraph (p) of this Rule if they: 

(1) are age 65 or older; and 

(2) have been continuously licensed in the 
line of insurance for at least 25 years; 
and either 

(3) hold a nationally recognized profession- 
al designation for the line of insurance. 
Acceptable designations include those 
listed in 11 NCAC 6A .0803 (a) and 
(Id); or 

(4) meet the requirements of Subparagraphs 
(1) and (2) of this Paragraph and certify 
to the Department of Insurance annually 
they are inactive agency owners who 
neither solicit applications for insurance 
nor take part in the day to day opera- 



1399 



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November 1, 1993 



PROPOSED RULES 



tion of the agency. 

(m) Courses completed prior to the issue date of 
a new license do not meet the requirements of this 
Section for that new license. 

(n) No credit will be given for courses taken 
before they have been approved by the Depart- 
ment. 

(o) Persons who hold adjuster licenses shall 
obtain 12 ICECs during each calendar year in 
approved fire and casualty property and liability 
courses, including, in calendar year 1993 and each 
even-numbered calendar year thereafter, the 
mandatory statute and rule update required by 
Paragraph (p) of this Rule. As used in this Sec- 
tion, "licensee" includes a person who holds an 
adjuster license and who is required to comply 
with this Section. 

(p) In calendar year 1994 and in each even- 
numbered calendar year thereafter, each licensee 
shall complete an approved course that comprises 
information about and instruction in insurance and 
insurance-related statutes and administrative rules, 
including recent changes or developments in those 
statutes and rules. The Commissioner may also 
approve courses that also include relevant court 
decisions. 

(q) Each agent holding an active surplus lines 
license with an effective date before January J^ 
1994, must take a surplus lines course as part of 
the agent's 1994 property and liability continuing 
education requirement. Each agent issued a 
surplus lines license in 1994 must take a surplus 
lines course as part of the agent's 1995 property 
and liability continuing education requirement. 

Statutory Authority G.S. 58-2-40; 58-33-130. 

iS otice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Department of Insurance 
intends to adopt rule cited as 11 NCAC 10 . 1208. 

1 he proposed effective date of this action is 
February 1. 1994. 

Ihe public hearing will be conducted at 10:00 
a.m. on December 7, 1993 at the Dobbs Building, 
3rd Floor Hearing Room, 430 North Salisbury 
Street, Raleigh, NC 27611. 

Ixeason for Proposed Action: Necessary to carry 



out the provisions of a recent act of the General 
Assembly. 

(comment Procedures: Written comments may be 
sent to Dave Diehl at P.O. Box 26387, Raleigh, 
NC 27611. Oral presentations may be made at 
the public hearing. Anyone having questions 
should call Dave Diehl at (919) 733-3368 or Ellen 
Sprenkel at (919) 733-4529. 

tLditor's Note: This Rule was filed as a tempo- 
rary adoption effective October 11, 1993 for a 
period of 180 days or until the permanent rule 
becomes effective, whichever is sooner. 

CHAPTER 10 - PROPERTY AND 
CASUALTY DIVISION 

SECTION .1200 - FORMS FILINGS 

.1208 HEALTH CARE PROVIDER 
DEFINED; CGL POLICIES 

As used in G.S. 58-40-140. "health care provid- 
er" means any person who, under Chapter 90 of 
the General Statutes is licensed, registered, or 
certified to engage in the practice of or performs 
duties associated with any of the following: medi- 
cine, surgery, dentistry, pharmacy, optometry, 
midwifery, osteopathy, podiatry, chiropractic, 
radiology, nursing, physiotherapy, pathology, 
anesthesiology, anesthesia, laboratory analysis, 
rendering assistance to a physician, dental hygiene, 
psychiatry, psychology: or a hospital as defined by 
G.S. 131E-76(3); or a nursing home as defined by 
G.S. 131E-I01(6); or any other person who is 
legally responsible for the negligence of such 
person, hospital, or nursing home; or any other 
person acting at the direction or under the supervi- 
sion of any such person, hospital, or nursing 
home. 

Statutory Authority G. S 58-2-40; 58-40-140. 

IS otice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Department of Insurance 
intends to amend rules cited as 11 NCAC 12 
.1304, .1306 and .1307 

Ihe proposed effective date of this action is 
February 1. 1994. 



8:15 



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November 1, 1993 



1400 



PROPOSED RULES 



1 he public hearing will be conducted at 10:00 
a.m. on December 7, 1993 at the Dobbs Building, 
3rd Floor Hearing Room, 430 North Salisbury 
Street, Raleigh. NC 27611. 

MXeason for Proposed Action: Recent enactment 
of the General Assembly. 

K^orrunent Procedures: Written comments may be 
sent to Rodney Fmger at P.O. Box 26387, Ra- 
leigh, NC 27611. Oral presentations may be 
made at the public hearing. Anyone hanng ques- 
tions should call Rodney Fmger at (919) 733-5060 
or Ellen Sprenkel at (919) 733-4529. 

Editor's Note: These Rules were filed as tempo- 
rary amendments effective October 11, 1993 for 
a period of 180 days or until the permanent rules 
become effective, whichever is sooner. 

CHAPTER 12 - LIFE AND HEALTH 
DIVISION 

SECTION .1300 - SMALL EMPLOYER 
GROUP HEALTH COVERAGE 

.1304 COMPLIANCE 

(a) Each carrier and third party administrator 
shall file a report on North Carolina small employ- 
er group insurance activity' annually on or before 
March 15, which report shall describe case charac- 
teristics and numbers of health benefit plans in 
various categories marketed or issued to small 
employers. The report shall be in a format pre- 
scribed by the Commissioner 

fb) — On and after August 1 4 . 1902. each carrier 
shall ofi^er both s tatutory plans to any small cm 
ployer whose application for coverage the carrier 
refused if the refusal occurred on or after January 
1. 1092. but before August 1 4 . 1992. This offer 
may be made at the anniversary' of the declination, 
but not later than August 13, 1993. 

fe^ — A carrier that offers coverage to a s mall 
employer — shall — ofl^er coverage — te — eaeh — eligible 
employee and to each eligible dependent. — Tbe 

£b] Each carrier shall provide the same health 
benefit plan to those eligible employees and depen- 
dents. 

(c) {^ A carrier shall not set contribution and 
participation requirements for the statutory plans 
that are more restrictive than those for the carrier's 
nonstatutory plans. 



fe) — In applying minimum participation r e quir e 
mcntfl for a small employer and in dctcrmini flg 
whether the applicable percentage of participation 
i s met, a carrier shall not consider cmployeca or 
depwndenta who have existing coverage, whether 
the coverage is through another employer based 
health benefit plan, an individual health insurance 
policy. Medicare, or Medicaid. 

(d) If any eligible employee or dependent has 
qualifying existing coverage, as defined in G.S. 
58-50- 130(a)(5), and therefore does not participate 
in the employer's health benefit plan, a carrier is 
not required to issue or renew the employer's plan 
unless either: 

(1) at least two eligible employees in a 
group of seven or less elect to partici- 
pate; or 

(2) at least 25 percent of eligible employees 
in a group of more than seven elect to 
participate. 

(e) f#) Each carrier shall offer both statutory 
plans to any small employer upon request or if the 
carrier is unable to issue a nonstatutory plan to the 
small employer applicant. 

(fj (g^ A carrier shall provide an extension of 
benefits to any insured who is a hospital inpatient 
until the insured is released by the hospital if the 
insured's existing coverage would end during the 
insured's hospital stay and if replacement coverage 
is not available to the insured, subject to the 
continued payment of monthly premiums or dues 
by the insured. 

(g) fb) New business applications submitted to 
a carrier on and after September 1, 1992, shall be 
accompanied by a statement signed by the produc- 
er and the small employer applicant that certifies 
that the employer understands that the firm may 
elect coverage under the statutory plans. The 
disclosure form shall be made part of such state- 
ment. A copy of the signed statement and disclo- 
sure form must be provided to the small employer 
applicant. Tlie disclosure form shall be in a form 
prescribed by the Commissioner. 

(Ti) ft) If a carrier establishes more than one 
class of business under G.S. 58-50- 1 1 3 . the carrier 
shall maintain at least one basic and standard 
health care plan in each class of business so 
established. Nothing in this Section prevents a 
carrier from offering the statutory plans through an 
association or multiple employer trust. 

Statutory Authority G.S 58-2-40(1): 58-50-105: 
58-50-113: 58-50-120(0(4): 58-50-1 20(c)(6): 
58-50-125fd): 58-50-130(a)(2): 58-50-1 30(a)(5): 
58-50-1 30(d): 58-50-130(0- 



1401 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



.1306 REENSURANCE POOL 

(a) Conditions and procedures regarding partioi 
pation in and administration of the Pool shall be 
promulgated by the Board- 
fa) fb) Reinsurance is available for coverage of 

eligible employees, their dependents, or the entire 
small employer group under any health benefit 
plan issued as new business by a reinsuring carrier 
to an eligible small employer on and after August 
14, 1992. Reinsurance is also available to eligible 
small employers who were refused coverage 
between January 1, 1992 and August 13, 1992, 
and were subsequently issued a statutory plan. 

(b) {e) Subject to any other restrictions of this 
Section, a reinsuring carrier may reinsure an 
eligible employee, an eligible employee's depen- 
dent, or a small employer group who has insurance 
coverage under any health benefit plan subject to 
the Act. 

(d^ — Reinsurance is available for coverage of a 
late cnrollcc as of the effective date of his or her 
coverage, subject to any other restrictions of this 
Section. 

£c} ^ No carrier or producer shall disclose to 
insureds that their coverage is reinsured by the 
Pool. 

(d) ff) A reinsuring carrier shall apply for 
reinsurance within 60 days after the effective date 
of coverage. A reinsuring carrier's decision to 
reinsure a risk shall be based on the review of 
underwriting taken at the time of application. TTie 
decision may not be based on the small employer 
group's claims that have accrued since the effec- 
tive date of coverage. 

(e) {^ Reinsurance coverage may remain in 
effect, in the reinsuring carrier's and the Pool's 
discretion, as long as the reinsured coverage 
remains in effect. When the reinsured coverage 
terminates, reinsurance will be terminated. 

(f) fb) A reinsuring carrier may terminate 
reinsurance on an individual or a group without 
terminating the reinsured coverage; and that 
reinsuring carrier shall not thereafter apply for 
reinsurance for the person or persons covered. 

(g) (t) A reinsuring carrier may reinsure a 
previously-declined individual upon enrollment in 
a health benefit plan or within 60 days after that 
enrollment, subject to any restrictions of this 
Section. 

(h) fj) Any reinsuring carrier whose health 
benefit plan also covers extra eligibles may not 
reinsure the coverage of those extra eligibles. 

(i) fk) Any new entrant in a health benefit plan 
may be reinsured on the effective date of his or 
her coverage but no later than 60 days after that 



date, subject to any other restrictions of this 
Section. 

Statutory Authority G.S. 58-2-40(1); 
58-50-1 30(b)(4); 58-50-150(a); 58-50-1500(5); 
58-50-150(g). 

.1307 GUARANTEED ISSUE AND 
RENEWAL 

(a) No carrier shall decline an application for 
coverage under the statutory plans. A carrier may 
continue to issue health benefit plans other than the 
statutory plans. 

(b) If an eligible employee commits fraud or 
makes material misrepresentation to a carrier, the 
carrier may rescind coverage for that employee. 
If the small employer commits fraud or makes a 
material misrepresentation to a carrier, the carrier 
may rescind coverage for that entire small employ- 
er group. 

(c) TTie late enroUee provision in G.S. 
58-50- 130(a)(4) applies to all health benefit plans 
subject to the Act. 

(d) Any health benefit plan covering an employ- 
er that by definition becomes a small employer is 
not subject to the Act until the next anniversary 
date of that plan. 

(e) Any health benefit plan covering a small 
employer that by definition loses its status as a 
small employer is subject to the Act until the next 
anniversary date of that plan. At that time, the 
carrier shall determine if the employer is by 
definition a small employer. If the employer is not 
a small employer, the carrier may terminate the 
plan. If the carrier does not terminate the plan, 
the carrier shall amend the plan with riders or 
endorsements to comply with requirements of 
statutes and rules that were not reflected in the 
plan before the anniversary date. 

(f) Before a plan anniversary date, a small 
employer may request that coverage be changed 
from one statutory plan to another statutory plan. 

(g) — All health benefit plans subject to the Act 
that arc delivered, issued for delivery, renewed, or 
continued in this State or covering pKjrsons re s iding 
in this State on and after August 1 4 , 1992. must 
provide coverage for all eligible employees and 
their dependents — who ar e willing and — able to 
participate regardless of their health and without 
exclu s ionary riders or modifications of coverage of 
any kind. — Carriers arc not required to issue other 
health benefit plans subject to the Act up)on re 
quest; but if such plan s arc is s ued, a carrier mu s t 
issue coverage to all eligible employees and their 
d e pendents who arc willing and abl e to participate. 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1402 



PROPOSED RULES 



without exclusionary ridcnB or modificationa of 
coverage of any kind. 

{b^ Previously declined — individuals shall be 

provided opKsn enrollment periods in which they 
may enroll in the health benefit plan in force for 
the small employer group. — This enrollment period 
shall be no less than 30 day s and shall begin no 
later than the first plan anniversary date that falls 
on or after August 1 4 , 1992. — If a small employer 
chooses not to renew an exi s ting health benefit 
plan on or after August 1 4 , 1992. any subsequent 
carrier shall provide the open enrollment period 
for previously declined individuals. 

(g) (i) Previously declined individuals are not 
late enrollees unless they fail to enroll during their 
initial enrollment periods. 

{hj fj) On the next health benefit plan anniversa- 
ry date that falls on or after August 14, 1992, a 
carrier shall remove all exclusionary riders or 
conditional modifications on any health benefit 
plan that is subject to the Act. 

(i) ^ A carrier may base termination on non- 
payment of premium; and shall apply termination 
decisions uniformly to all of the carrier's small 
employer group business. 

iij 0) A carrier is not required to issue a statuto- 
ry plan to a small employer if within the prior 12 
months the carrier terminated a health benefit plan 
of the small employer because the employer: 

(1) failed to pay the premium; 

(2) committed fraud or materially misrepre- 
sented information necessary to deter- 
mine the group size, group participation 
rate, or the group premium rate; or 

(3) failed to materially comply with a 
health benefit plan provision, including 
carrier requirements for employee 
group premium contributions. 

(k) {ffi) All health benefit plans subject to the 
Act that were delivered, issued for delivery, 
renewed, or continued in this State or covering 
persons residing in this State on or after January 1, 
1992, must be guaranteed renewable, except for 
the reasons listed in G.S. 58-50-130(a)(3). 

(1) {fi) Each carrier shall provide an open enroll- 
ment period for a new entrant to be added to the 
health benefit plan. The open enrollment period 
shall be at least 30 days in length. A new entrant 
who is a new eligible employee shall be added to 
the plan within 90 days of his or her employment. 
A new entrant who is a dependent shall have an 
open enrollment period of at least 30 days, begin- 
ning on the date he or she becomes a dependent of 
an eligible employee, if the eligible employee has 
coverage. If a new entrant does not apply for 



coverage by the end of the open enrollment period, 
he or she is a late enrollee unless he or she meets 
the requirements of G.S. 58-50-1 10(14)a, b, or c. 

Statutory Authority G.S. 58-2-40(1); 58-50-105; 
58-50-125(d); 58-50-125(e)(l); 58-50-130(a); 
58-50-130(h). 

iSotice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Department of Insurance 
intends to amend rule cited as 11 NCAC 16 .0205. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on December 7, 1993 at the Dobbs Building, 
3rd Floor Hearing Room, 430 North Salisbury 
Street, Raleigh, NC 27611. 

MXeason for Proposed Action: This data item is 
needed to help determine credibility factors and 
also utilization rates. 

l^omment Procedures: Written comments may be 
sent to Viiller James at P.O. Box 26387, Raleigh, 
NC 27611. Oral presentations may be made at 
the public hearing. Anyone having questions 
should call miter James at (919) 733-3284 or 
Ellen Sprenkel at (919) 733-4529. 

CHAPTER 16 - ACTUARIAL SERVICES 
DIVISION 

SECTION .0200 - INDIVIDUAL ACCIDENT 
AND HEALTH INSURANCE 

,0205 DATA REQUIREMENTS FOR RATE 
REVISION SUBMISSION 

With respect to any individual accident and 
health insurance policy governed by Articles 1 
through 64 of Chapter 58 for which an adjustment 
of premium rate to in force policies is allowed by 
law, the insurer shall submit an actuarial memo- 
randum describing and demonstrating the develop- 
ment of any requested premium rate revision. The 
actuarial memorandum shall contain a subsection 
clearly identified as "Additional Data Require- 
ments." The initial rate revision filing shall be 
submitted to and stamped received by the Depart- 



1403 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



ment's Life and Health Division. An insurer shall 
submit all data required by this Rule within 45 
days after the date that the initial rate revision 
filing is stamped received. Subsequent data 
submissions on incomplete initial rate revision 
filings shall be made directly to the Department's 
Actuarial Services Division within the 45 day 
period. An insurer may continue to submit data in 
accordance with data submission procedures 
followed before the efi^ective date of this Rule for 
a period not to exceed one year after the effective 
date of this Rule if an authorized officer of the 
insurer certifies to the Commissioner that the 
insurer's current information system cannot assem- 
ble data as required by this Rule. The data re- 
quired in the "Additional Data Requirements" 
subsection shall include: 

(1) Identification of the submitted data as 
North Carolina or countrywide and con- 
sistent use of this data identification 
throughout this Section. 

(2) Identification of all policy forms by 
approved North Carolina policy form 
number. 

(3) The month, year, and percentage amount 
of all previous rate revisions. 

(4) The month and year that the rate revision 
is scheduled to be implemented (hereinaf- 
ter referred to as the "implementation 
date"). 

(5) The type of renewability provision con- 
tained in each policy form, e.g. guaran- 
teed renewable. 

(6) The type of coverage provided by each 
policy form, e.g. medical expense. 

(7) The National Association of Insurance 
Commissioners minimum guideline loss 
ratio and, if different, the insurer's mini- 
mum guideline loss ratio. 

(8) The average annual premium for North 
Carolina and countrywide before and 
after the implementation of the rate revi- 
sion. 

(9) The number of North Carolina and coun- 
trywide policyholders affected by the rate 
revision. 

(10) TTie requested rate revision percentage 
attributable to experience. 

(11) The requested rate revision percentage 
attributable to changes in benefits pro- 
mulgated by Medicare, if applicable. 

(12) Identification and actuarial justification of 
all groupings of policy forms. 

(13) The historical calendar year earned pre- 
mium subdivided by duration and ex- 



pressed on an actual and a current premi- 
um rate basis for the period of time from 
the earliest date that experience is record- 
ed to the most recent date experience is 
recorded. 

(14) The "expected" incurred loss ratios by 
duration based upon original pricing 
assumptions for duration one through the 
latest duration contained within the fifth 
year following the implementation date. 

(15) The "expected" lapse rates by duration 
based upon original pricing assumptions 
for duration one through the latest dura- 
tion contained within the fifth year fol- 
lowing the implementation date. 

(16) The "actual" lapse rates for duration one 
through the duration coinciding with the 
calendar year for which the most recent 
experience is recorded. 

(17) The historical calendar year incurred 
claims, for other than Medicare supple- 
ment insurance, covering the period of 
time from the earliest date that experi- 
ence is recorded to the most recent date 
experience is recorded. 

(18) The historical calendar year incurred 
claims, for Medicare supplement insur- 
ance, expressed on an actual and a cur- 
rent benefit level basis covering the 
period of time from the earliest date 
experience is recorded to the most recent 
date experience is recorded. 

(19) A count of the number of incurred claims 
for each calendar year of data provided; 
which means the total number of claims 
reported durinp the calendar year (wheth- 
er paid or in the process of payment), 
plus the number of incurred but not 
reported claims at the end of the calendar 
year, minus the number of incurred but 
not reported claims at the beginning of 
the calendar year. For disability income 
insurance, only the initial claim payment 
for each period of disablement shall be 
counted. For each type of medical ex- 
pense benefit, only the initial claim pay- 
ment per cause shall be counted; for 
example, payments for continuation of a 
claim, such as refills on a prescription 
drug, are to be excluded from the in- 
curred claim count. 

(20) f+9) An estimation of the amount of 
policy year exposure contributed by all 
policyholders within each calendar year 
of data provided. 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1404 



PROPOSED RULES 



(21) 

(22) 



(23) 
(24) 



(25) 
(26) 



(27) 
(28) 



(29) 



(30) A statement declaring whether this is 
an open bloclc of business or a closed 
block of business. 

(34-) An estimation of the annual earned 
premium on new issues for the period of 
time from the date that the most recent 
experience is last recorded to a date not 
exceeding the fifth year following the 
implementation date. 

(33) The number of months that the rate 
will be guaranteed to an individual poli- 
cyholder. 

(3^ The rate revision implementation 
method, such as the next premium due 
date following a given date, the next 
policy anniversary date, or otherwise; if 
otherwise, an explanation must be includ- 
ed. 

(34) A statement declaring the month and 
year of the earliest anticipated date of the 
next rate revision. 

(3#) An explanation and actuarial justifi- 
cation of the apportionment of the aggre- 
gate rate revision within each policy form 
or between policy forms that have been 
grouped; and a demonstration that the 
apportionment of the aggregate rate 
revision yields the same premium income 
as if the rate revision had been applied 
uniformly. 

(36) An explanation and actuarial justifi- 
cation, if applicable, for changing any 
factor that afl'ects the premium. 
(3^ An explanation of the effect that the 
rate revision will have on the incurred 
loss ratio on those policies in force for 
three years or more as exhibited in the 
Medicare Supplement Experience Exhibit 
of the Annual Statement. 
(3^ The name, address, and telephone 
number of an insurance company repre- 
sentative who will be available to answer 
questions relating to the rate revision. 



Statutory Authority 
58-63-15(7)b. 



as. 58-2-40(1); 58-5 J -95; 



TITLE ISA - DEPARTMENT OF 

ENVIRONMENT, HEALTH, AND 

NATURAL RESOURCES 

Jy/otice is hereby given in accordance with G.S. 
150B-21.2 that the EHNR - Coastal Management 
intends to amend rules cited as 15A NCAC 7H 



.0104 and .0304. 

1 he proposed effective date of this action is April 
1, 1994. 

1 he public hearings will be conducted on the 
following dates and locations: 

4:00 p.m. 

November 18, 1993 

Ramada Inn 

1 701 South Virginia Dare Trail 

Kill Devil Hills, NC 

7:00 p.m. 

November 22, 1993 

Currituck Co. Satellite Office 

1123 Ocean Trail 

Corolla, NC 27927 

7:00 p.m. 

November 30, 1993 

Marine Fisheries Bldg. 

3441 Arendell St. 

Morehead City, NC 28557 

7:00 p.m. 

December 1, 1993 

Old Fire Station 

Town of N. Topsail Beach 

1 Gray St. 
Topsail Beach, NC 28445 

7:00 p.m. 

December 2, 1993 

Ocracoke School 

State Rd. 1325 

OffHwy. 12 

Ocracoke, NC 27960 

7:00 p.m. 

December 6, 1993 

Town of Surf City 

Town Hall 

214 N. Ne\i' River Dr 

Surf City. NC 28445 

7:00 p.m. 

December 7, 1993 

Wilmington Regional Office 

127 Cardinal Dr. Extension 

Wilmington. NC 28405-3845 



i 



{ 



i 



1405 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



7:00 p.m. 

December 8, 1993 

Brunswick County Public 

Assembly Building 

45 Courthouse Drive 

Bolivia, NC 28422 

MXeasonfor Proposed Action: 
ISA NCAC 7H .0104- Proposed amendments will 
make exceptions to the new Erosion Rates for 
development that has been planned on existing 
lots. 

ISA NCAC 7H .0304 - Proposed amendments will 
incorporate the updated 1992 rates of shoreline 
change into CAMA for use in delineating the 
Ocean Hazard Area of Environmental Concern and 
for determining setbacks for oceanfront develop- 
ment. These rates are periodically updated to 
include recent trends into the long term average 
rate of change. 

i^omment Procedures: All persons interested in 
this matter are invited to attend the public hear- 
ings. The Coastal Resources Commission will 
receive mailed written comments postmarked no 
later than December 17. 1993. Any person desir- 
ing to present lengthy comments is requested to 
submit a written statement for inclusion in the 
record of proceedings at the public hearings. 
Additional information concerning the hearings or 
the proposals may be obtained by contacting 
Dedra Blackwell, Division of Coastal Manage- 
ment, PO Box 27687, Raleigh, NC 27611-7687, 
(919) 733-2293. 

hiditor's Note: Text shown in Bold Italics in 
Rule .0304 was adopted by the agency on Septem- 
ber 24, 1993. These changes are pending review 
by the Rules Review Commission for an effective 
date of December 1, 1993. 

CHAPTER 7 - COASTAL MANAGEMENT 

SUBCHAPTER 7H - STATE GUIDELINES 

FOR AREAS OF ENVIRONMENTAL 

CONCERN 

SECTION .0100 - INTRODUCTION AND 
GENERAL COMMENTS 

.0104 DEVELOPMENT INITIATED PRIOR 
TO EFFECTIVE DATE OF 
REVISIONS 



(a) The following Rules shall be used to deter- 
mine whether the revisions to guidelines for 
development in areas of environmental concern 
(hereinafter referred to as revisions), with an 
effective date of June 1, 1979, shall apply to a 
proposed development. 

(1) In the case of a development for which 
a CAMA permit was required prior to 
June 1, 1979, the revisions shall not be 
applicable if a complete and sufficient 
application for a CAMA permit was 
filed and accepted before June 1, 1979. 
However if the application should lapse 
or be denied, thereby requiring a new 
application after June 1, 1979, or if the 
application is modified or renewed after 
June 1, 1979, the revisions shall be 
made applicable. 

(2) In the case of a development for which 
no CAMA permit was required prior to 
July 15, 1979, the revisions shall not be 
applicable if all legally required permits 
have been applied for and accepted in 
accordance with the applicable rules of 
the agency responsible for the permit. 
However, if the application should 
lapse or be denied, thereby requiring a 
new application after July 15, 1979, or 
if the application is modified or 
renewed after July 15, 1979, the 
revisions shall be applicable. 

(3) In those cases where a CAMA major 
permit was issued before June 1, 1979, 
for a major development which 
included platted lots, the new standards 
shall apply to such platted lots only to 
the maximum extent possible without 
effectively prohibiting the intended use 
of those lots. In order for this Rule to 
apply, the following conditions must be 
met: 

(A) the lot on which the proposed 
development is to be located shall 
have been accurately shown on the 
major development permit application 
and the boundaries must not have 
been significantly altered. 

(B) the lot on which the proposed 
development is to be located shall 
have been suitable for the intended 
use according to the ABC guidelines 
in effect at the time the major permit 
was issued. 

(C) a minor development permit must be 
applied for and received according to 



8:1S 



NORTH CAROLINA REGISTER 



November 1, 1993 



1406 



PROPOSED RULES 



the normal minor permit process 

before development can begin. 

(D) this Rule shall apply only to 

development for which a permit 

application is submitted prior to 

expiration of the major development 

permit issued before June 1, 1979. 

(4) In those cases where any necessary 

local approval was issued for a 

proposed subdivision development prior 

to July 15, 1979, the Division of 

Coastal Management advised the 

developer in writing where to locate the 

ocean setback line for the proposed 

subdivision, and the proposed 

subdivision development was recorded 

in the county registry prior to July 15, 

1979, with the ocean setback 

determined by the Division of Coastal 

Management, any new standards 

regarding oceanfront setbacks shall 

apply to the platted lots within the 

proposed subdivision only to the 

maximum extent possible without 

effectively prohibiting the intended use 

of those lots. In order for this Rule to 

apply, the following conditions must be 

met: 

(A) the lot(s) on which the proposed 
development is to be located shall 
have been accurately shown on an 
approved local plat and the boundaries 
must not have been significantly 
altered; 

(B) the lot(s) on which the proposed 
development is to be located shall 
have been suitable for the intended 
use according to the AEC guidelines 
in effect at the time the plat was 
approved; and 

(C) a minor development permit(s) must 
be applied for and received according 
to the normal minor permit process 
before development can begin. 

(b) The oceanfront setback provisions 

specifically applicable to large structures, as set 
forth by Rule .0306(a)(4) of this Subchapter, shall 
apply only to development applications received on 
or after November 1, 1983. Further, Rule 
.0306(a)(4) of this Subchapter shall only apply to 
the maximum extent possible without effectively 
prohibiting the intended use of the property in the 
following situations: 

(1) the completion of projects that had 
received valid CAMA permits prior to 



November 1, 1983, provided that 
permit renewals, modification and 
transfer requests for these projects 
made pursuant to I5A NCAC 7J .0404, 
.0405 and .0406 and 15A NCAC 7E 
.0105 shall be considered under the 
setback rules applicable at the time of 
original permit issuance, and no 
renewals or extensions of pre-existing 
permits shall be made beyond the 
expiration period unless either there has 
been substantial progress on 
construction or no material change in 
the physical conditions at the project 
site (as is provided by 15A NCAC 7J 
.0403); and 
(2) the completion of projects that were 
outside of CAMA permit jurisdiction 
prior to November 1, 1983, provided 
that all other required state and local 
permits had been applied for in accord- 
ance with the rules of the agencies 
responsible for such permits and that 
the developer has materially changed 
his or her position in good faith 
reliance on such development 
approvals. In all instances, such 
development must be consistent with all 
other provisions of this Subchapter. 

(c) In the case of subdivisions or projects which 
have received either all required final or 
preliminary local approvals or a CAMA major 
development permit prior to May 27, 1988, and 
have therein met all applicable CAMA setback 
requirements as of May 27, 1988, the updated 
oceanfront erosion rates approved by the 
Commission on July 29, 1988, and effective on 
November 1, 1988, shall only apply to the 
maximum extent feasible. For these previously 
approved lots and projects, the erosion rate ex- 
isting as of May 27, 1988, shall be applied in 
determining minimum oceanfront setbacks for 
purposes of subsequent approved construction or 
development prior to the next erosion rate update. 

(d) In the case of subdivisions or projects which 
have received either all required final or 
preliminary local approvals or a CAMA major 
development permit since May 27, 1988 and prior 
to September 23, 1993 and have therein met all 
applicable CAMA setback requirements as of 
September 23, 1993 the updated oceanfront 
erosion rates approved by the Commission on 
January 28, 1994 and effective on April L, 1994 
shall only apply to the maximum extent feasible. 
For these previously approved lots and projects. 



1407 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



FROFOSED RULES 



I 



the erosion rate existing as of September 23, 1993 
shall be a pplied in determining minimum 
oceanfront setbacks for purposes of subsequent 
approved construction or development prior to the 
next erosion rate update. 



Statutory Authority G. S. 
n3A-124. 



113A-107; 113A-113; 



\ 



) 



SECTION .0300 - OCEAN 
HAZARD AREAS 

.0304 AECs WITHIN OCEAN HAZARD 
AREAS 

The ocean hazard system of AECs contains all of 
the following areas: 

(1) Ocean Erodible Area. This is the area in 
which there exists a substantial possibility 
of excessive erosion and significant 
shoreline fluctuation. The seaward 
boundary of this area is the mean low 
water line. The landward extent of this 
area is determined as follows: 

(a) a distance landward from the first line 
of stable natural vegetation to the 
recession line that would be established 
by multiplying the long-term annual 
erosion rate times 60, provided that, 
where there has been no long-term 
erosion or the rate is less than two feet 
per year, this distance shall be set at 
120 feet landward from the first line of 
stable natural vegetation. For the 
purposes of this Rule, the erosion rates 
shall be those set forth in tables maps 
entitled "Long Term Annual Erosion 
Shoreline Change Rates updated 
through 19 8 6 1992 " and approved by 
the Coastal Resources Commission on 
July 29, 19 88 January 28. 1994 (except 
as such rates may be varied in 
individual contested cases, declaratory 
or interpretive rulings). The tables 
maps are available without cost from 
any local permit officer or the Division 
of Coastal Management; and 

(b) a distance landward from the recession 
line established in Subparagraph (a) of 
this Paragraph Sub-Item (l)(a) of this 
Rule to the recession line that would be 
generated by a storm having a one 
percent chance of being equalled or 
exceeded in any given year. 

The High Hazard Flood Area. This is 
the area subject to high velocity waters 



(2) 



(including, but not limited to, hurricane 
wave wash) in a storm having a one 
percent chance of being equalled or 
exceeded in any given year, as identified 
as zone VI -30 on the flood insurance rate 
maps of the Federal Insurance Adminis- 
tration, U.S. Department of Housing and 
Urban Development. In the absence of 
these rate maps, other available base 
flood elevation data prepared by a feder- 
al, state, or other source may be used, 
provided said data source is approved by 
the CRC. 

(3) Inlet Hazard Area. The inlet hazard 
areas are natural-hazard areas that are 
especially vulnerable to erosion, flooding 
and other adverse effects of sand, wind, 
and water because of their proximity to 
dynamic ocean inlets. This area shall 
extend landward from the mean low 
water line a distance sufficient to encom- 
pass that area within which the inlet will, 
based on statistical analysis, migrate, and 
shall consider such factors as previous 
inlet territory, structurally wesik areas 
near the inlet (such as an unusually nar- 
row barrier island, an unusually long 
channel feeding the inlet, or an overwash 
area), and external influences such as 
jetties and channelization. These areas 
shall be identified on inlet hamrd area 
maps approved by the Coastal Resources 
Commission. The areas identified as 
sussested Inlet Hamrd Areas included 
in the report entitled INLET HAZARD 
AREAS, The Final Report and Recom- 
mendations t_o the Coastal Resources 
Commission, 1978, by Loie Xl Priddy 
and Rick Carrawav are hereby desienat- 
ed as Inlet Hamrd Areas except that the 
Cape Fear Inlet Hamrd as shown on 
said map shall not extend northeast o[ 
the Baldhead Island marina entrance 
channel. In all cases, this area shall be 
an extension of the adjacent ocean erod- 
ible area and in no case shall the width of 
the inlet hazard area be less than the 
width of the adjacent ocean erodible area. 

(4) Unvegetated Beach Area. This is a 
dynamic area that is subject to rapid 
unpredictable landform change from wind 
and wave action. The areas in this cate- 
gory shall be designated following de- 
tailed studies by the Coastal Resources 
Commission. These areas shall be desig- 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1408 



PROPOSED RULES 



nated on maps approved by the Commis- 
sion and available without cost from any 
local permit officer or the Division of 
Coastal Management. 

Statutory Authority G.S. 113A-107; 113A-113; 
USA- 124. 

****************** 



written comments must be delivered or mailed to 
the N.C. Wildlife Resources Commission, 512 N. 
Salisbury Street, Raleigh, NC 27604-1188. 

CHAPTER 10 - WILDLIFE RESOURCES 
AND WATER SAFETY 

SUBCHAPTER lOB - HUNTING AND 
TRAPPING 



I\otice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Wildlife Re- 
sources Commission intends to adopt rules cited as 
ISA NCAC lOB .0123; lOH .0813 and amend 
rules cited as ISA NCAC lOB .0119; lOF .0330; 
lOH .0806; 101 .0002 - .0003. 

1 he proposed effective date of this action is 
March 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on November 22, 1993 at the 3rd Floor 
Conference Room, Archdale Building, 512 North 
Salisbury Street, Raleigh, NC 27604-1188. 

MXeason for Proposed Action: 
ISA NCAC lOB .0119 - To restrict the collection 
of spotted turtles. 

ISA NCAC lOB .0123 - To prohibit possession of 
tongueless or African Clawed Frog. 
ISA NCAC lOF .0330 - To establish a no v^ake 
zone north of the Beaufort Drawbridge on the 
Newport River 

ISA NCAC lOH .0806 - To require falconry 
permittees to report all acquisitions and disposi- 
tions of raptors to the U.S. Fish and Wildlife 
Service and to the Wildlife Resources Commission. 
ISA NCAC lOH .0813 - To establish permit re- 
quirements for raptor propagation permit. 
ISA NCAC 101 .0002 - To allow raptors listed as 
a special concern species to be taken from the wild 
pursuant to a permit and to allow captive-bred 
raptors listed as special concern species to be 
bought, sold or bartered. 

ISA NCAC 101 .0003 - To designate the Carolina 
Heelsplitter as an endangered species. 

i^omment Procedures: Interested persons may 
present their views either orally or in writing at 
the hearing. In addition, the record of hearing 
mil be open for receipt of written comments from 
November 1, 1993 to December 1, 1993. Such 



SECTION .0100 - GENERAL 
REGULATIONS 

.0119 WILDLIFE COLLECTORS 

(a) Collection Licenses. The Executive Director 
is authorized to license qualified individuals to take 
or collect any species of wildlife resources except 
that endangered, threatened, special concern 
species, spotted turtles (Clemmys guttata). Eastern 
diamondback rattlesnakes, Carolina pygmy rattle- 
snakes, and Eastern coral snakes may not be taken 
or collected except under a special permit issued 
by the Executive Director for research proposes . 
This Rule shall not prohibit an individual from 
killing an endangered, threatened, or special 
concern species, or an Eastern diamondback 
rattlesnake, Carolina pygmy rattlesnake, or Eastern 
coral snake in defense of his own life or the lives 
of others without a permit. Individuals who hold 
less than five reptiles or less than 25 amphibians 
not on the endangered, threatened or special 
concern lists and not including spotted turtles 
(Clemmys guttata). Eastern diamondback rattle- 
snakes, Carolina pygmy rattlesnakes, and Eastern 
coral snakes are exempted from this license re- 
quirement. Such license shall be issued upon 
payment of a fee in accordance with the General 
Statutes, except that licenses may be issued to 
representatives of educational or scientific institu- 
tions or of governmental agencies without charge. 
Such license may be used in lieu of any other 
hunting or trapping license required by law and 
shall authorize possession and transportation of the 
wildlife incidental to the authorized taking, except 
that it shall not authorize the taking, possession or 
transportation of any species of wildlife in viola- 
tion of federal laws or regulations. 

(b) Qualifications of Licensees. In addition to 
representatives of educational and scientific institu- 
tions and governmental agencies, the collection 
license may be issued to any individual for any 
worthwhile purpose when such is not deemed 
inimical to the efficient conservation of the species 
to be collected or to some other wildlife species 
that may be dependent thereon. 



1409 



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NORTH CAROLINA REGISTER 



November 1, 1993 



FRUFUSED RULES 



(c) Methods of Taking. The manner of taking 
wildlife resources under a collection license may 
be specified by the Executive Director and need 
not be restricted to the usual methods of hunting or 
trapping. 

(d) Term of License. The Executive Director 
may, in his discretion, impose time limits and 
other restrictions on the duration of any collection 
license, but unless so restricted the license shall be 
valid from January 1 through December 3 1 of the 
applicable year. 

(e) Report of Collecting Activity. Each individ- 
ual licensed under this Rule shall submit a written 
report to the Executive Director within 15 days 
following the date of expiration of the license. 
The report shall be on a form supplied by the 
Wildlife Resources Commission and shall show the 
numbers of each species taken under the license 
and the use or disposition thereof. The Executive 
Director may require additional information for 
statistical purposes such as the dates and places of 
the taking and the sex, size, weight, condition, and 
approximate age of each specimen taken. Such 
additional information may be required on the 
form of report or by a separate writing accompa- 
nying the form. 

(f) Other Requirements and Restrictions. The 
Executive Director may, in his discretion, impose 
such other requirements and restrictions on persons 
licensed under this Rule as he may deem to be 
necessary to the efficient administration of the 
wildlife conservation laws and regulations. 

Statutory Authority G.S. 113-134; 113-272.4. 

.0123 POSSESSION OF CERTAIN 
SPECIES OF WILDLIFE 
RESOURCES 

It is unlawful to transport, purchase, possess, or 
sell any species of Tongueless or African Clawed 
Frog (Xenopus spp.) or to stock or release them in 
the public or private waters or lands of North 
Carolina, except that they may be possessed in 
indoor facilities of scientific and educational 
institutions by permit issued by the Executive 
Director pursuant to G.S. 113-274(c)(4) and 
containing such conditions and limitations as he 
deems necessary. 

Statutory Authority G.S. 113-134; 113-274; 113- 
292. 

SUBCHAPTER lOF - MOTORBOATS AND 
WATER SAFETY 



(2) 



(3) 



(4) 



SECTION .0300 - LOCAL WATER SAFETY 
REGULATIONS 

.0330 CARTERET COUNTY 

(a) Regulated Areas. This Rule applies to the 
following waters in Carteret County: 

(1) the waters of Money Island Slough 
beginning at the east end of Money 
Island near the Anchorage Marina Basin 
and ending at the west end of Money 
Island where Brooks Avenue deadends 
at the slough; 

the waters of Taylor Creek located 
within the territorial limits of the Town 
of Beaufort; 

the waters of Pelletier Creek beginning 
at the entrance to Pelletier Creek at the 
Intracoastal Waterway and ending at 
U.S. Highway 70; 

the waters of Bogue Sound in Morehead 
City between Sugar Loaf Island and the 
seawall on the south side of Evans, 
Shepard and Shackleford Streets and 
bounded on the east by the State Ports 
Authority and on the west by the east- 
em right-of-way margin of South 13th 
Street extended; 

the waters of Gallant's Channel from 
the US 70 crossing over the Grayden 
Paul bridge to Taylor's Creek; 
the waters of Cedar Island Bay and 
Harbor from U.S. 70 to Cedar Island 
Bay Channel Light 8; 
the waters of Radio Island Creek; 
the waters of the Newport River begin- 
ning at the north side of the Beaufort 
Draw Bridge and ending at marker §6. 

(b) Speed Limit. It is unlawful to operate a 
motorboat or vessel at a speed greater than 
no-wake speed while on the waters of the regulated 
areas designated in Paragraph (a) of this Rule. 

(c) Placement and Maintenance of Markers. 
The Board of Commissioners of Carteret County, 
with respect to the regulated areas designated in 
Subparagraphs (1), (3), (5), (6)^ (71 and £8) f^) of 
Paragraph (a) of this Rule, and the Board of 
Commissioners of the Town of Beaufort, with 
respect to the regulated area designated in 
Subparagraph (2) of Paragraph (a) of this Rule, 
and the Board of Commissioners of Morehead 
City, with respect to Subparagraph (4) of 
Paragraph (a) of this Rule, are designated as 
suitable agencies for placement and maintenance of 
the markers implementing this Rule, subject to the 
approval of the United States Coast Guard and the 



(5) 



(6) 



(7) 
18} 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1410 



PROPOSED RULES 



United States Army Corps of Engineers. 

Statutory Authority G. S. 75A-3; 75A-15. 

SUBCHAPTER lOH - REGULATED 
ACTIVITIES 

SECTION .0800 - FALCONRY 

.0806 CONDITIONS OF PERMIT 

Every falconry permit shall be issued subject to 
the following special conditions: 

(1) A permittee may not take, transport or 
possess a golden eagle (Aquila 
chrysaetos) unless authorized in writing 
by the U.S. Fish and Wildlife Service. 

(2) A permittee may trade or transfer a 
raptor to another permittee if the transac- 
tion occurs entirely within the state and 
no money or other consideration is in- 
volved. A permittee may trade or trans- 
fer a raptor to another permittee in an 
interstate transaction if the prior written 
approval of the commission Commission 
is obtained and no money or other con- 
sideration is involved in the transaction. 
A permittee must report all acquisitions 
and dispositions of raptors to the U.S. 
Fish and Wildlife Service and to the 
Commission on forms supplied by the 
Commission. A permittee may purchase, 
sell or barter any lawfully possessed 
raptor which is bred in captivity under a 
federal raptor propagation permit and 
banded with a numbered seamless marker 
provided by the U.S. Fish and Wildlife 
Service, provided: 

(a) the person receiving such raptor is 
authorized to possess it under this 
Section, or 50 CFR 21, or the foreign 
country of his residence or domicile in 
accordance with 50 CFR 
21.28(e)(2)(iii)(A);and 

(b) the The permittee transferring such 
raptor has acquired it from a person 
authorized to possess it as provided by 
the Subparagraph (a) of this Paragraph 
Subitem (2)(a) of this Rule . 

(3) A permittee may not take, possess, or 
transport a raptor in violation of the 
restrictions, conditions, and requirements 
of the federal and state falconry regula- 
tions. 

(4) The falconry seasons and the daily, pos- 
session and season bag limits are con- 



tained in ISA NCAC 1GB .0216. 

(5) A permittee must have his permit in 
possession at all times when raptor trap- 
ping devices or raptors are in his posses- 
sion away from his residence. 

(6) In addition to criminal penalties for viola- 
tions provided by federal and state stat- 
utes, permits are subject to suspension or 
revocation in accordance with applicable 
law. 

Authority G.S. 113-134; 1 13-270. 3(b)(5): 50 
CFR. 21.28: 50 C.F.R. 21.29. 

.0813 RAPTOR PROPAGATION PERMIT 

(a) Raptor propagation permits shall be obtained 
from the Commission and from the U.S. Fish and 
Wildlife Service prior to the captive breeding of 
any raptor. 

(b) Permit requirements, application procedures, 
issuance criteria, and additional permit conditions 
for issuance of federal raptor propagation permits 
are set forth in 50 C.F.R. 21 .30 which is hereby 
incorporated by reference and shall include any 
subsequent amendments. 

(1) The state permit shall run concurrently 
with the federal permit and will expire 
on the same date as the federal permit. 
The state permit may be revoked or 
renewal may be denied for violation of 
the provisions of 50 C.F.R. 21 .30. 

(2) A copy of all applications and other 
records required under 50 C.F.R. 21.30 
must be submitted to the Commission 
and to the U.S. Fish and Wildlife Ser- 
vice. 

(c) Protected species of raptors listed as species 
of s pecial concern in 15A NCAC 101 .0005, when 
lawfully acquired, may be propagated. 

(d) Sale of captive-bred raptors and raptors 
taken from the wild is prohibited. 

Authority G.S. 113-134: 1 13-270. 3(b)(5): 50 
C.F.R. 21.29. 

SUBCHAPTER 101 - ElVDANGERED ANT) 
THREATENED SPECIES 

.0002 PROTECTION OF ENDANGERED/ 
THREATENED/SPECIAL CONCERN 
SPECIES 

(a) No Open Season. There shall be no open 
season for taking any of the species listed as 
endangered in Rule .0003, threatened in Rule 
.0004 or, unless otherwise provided, as special 



1411 



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NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



concern in Rule .0005 of this Subchapter. Except 
as provided in Paragraphs (b), (c) and (e) of this 
Rule, it is unlawful to take or possess any of such 
species at any time. 

(b) Permits. The executive director may issue 
permits to take an endangered, threatened, or 
special concern species for the purpose of scientif- 
ic investigation relevant to perpetuation or restora- 
tion of said species or as a part of a commission- 
approved study or restoration effort. 

(c) Taking Without a Permit: 

(1) An individual may take an endangered, 
threatened, or special concern species 
in defense of his own life or the lives of 
others without a permit. 

(2) A state or federal conservation officer 
or employee who is designated by his 
agency to do so may, when acting in 
the course of his official duties, take, 
possess, and transport endangered, 
threatened, or special concern species 
without a permit if the action is neces- 
sary to: 

(A) aid a sick, injured, diseased or or- 
phaned specimen; 

(B) dispose of a dead specimen; 

(C) salvage a dead specimen which may 
be useful for scientific study; or 

(D) remove specimens which constitute a 
demonstrable but nonimmediate threat 
to human safety, provided the taking 
is done in a humane and noninjurious 
manner; the taking may involve injur- 
ing or killing endangered, threatened, 
or special concern species only if it is 
not reasonably possible to eliminate 
the threat by live-capturing and re- 
leasing the specimen unharmed, in a 
suitable habitat. 

(d) Reporting. Any taking or possession of an 
endangered, threatened, or special concern species 
under Subsections (b) and (c) of this Rule is 
subject to applicable reporting requirements of 
federal law and regulations and the reporting 
requirements of the permit issued by the Executive 
Director or of 15A NCAC lOB .0106(e). 

(e) Exception. 

(1) Notwithstanding any other provisions of 
this Rule, processed meat and other 
parts of American alligators, which 
have been lawfully taken in a state in 
which there is an open season for har- 
vesting alligators, may be possessed, 
bought and sold when such products are 
marketed in packages or containers 



which are distinctly labeled to indicate 
the state in which they were taken and 
the identity, location, and lawful au- 
thority of the processor or distributor. 

(2) Raptors listed as special concern species 
in Rule .0005 of this Subchapter may 
be taken from the wild for falconry 
purposes and for falconry propagation, 
provided that a valid North Carolina 
endangered species permit has been 
obtained as required in Paragraph (b) of 
this Rule. 

(3) Captive-bred raptors listed as s pecial 
concern species may be bought, sold, 
bartered or traded as provided in 50 
C.F.R. 21.30 when marked as required 
under those regulations. 

Statutory Authority G.S. 113-134; 113-291.2; 
113-291.3; 113-292; 113-333. 

.0003 ENDANGERED SPECIES LISTED 

(a) The following species of resident wildlife are 
designated as federally-listed endangered species: 

(1) Amphibians: 

None Listed At This Time 

(2) Birds: 

(A) American peregrine falcon (Falco 
peregrinus anatum); 

(B) Bachman's warbler (Vermivora 
bachmanii); 

(C) Bald eagle (Haliaeetus leucocephalus); 

(D) Ivory-billed woodpecker 
(Campephilus principalis); 

(E) Kirtland's warbler (Dendroica 
kirtlandi); 

(F) Red-cockaded woodpecker (Picoides 
borealis); 

(G) Roseate tern (Sterna d. dougallii); 
(H) Wood stork (Mycteria americana). 

(3) Fish: 

(A) Cape fear shiner (Notropis 
mekistocholas); 

(B) Shortnose sturgeon (Acipenser 
brevirostrum), when found in inland 
fishing waters. 

(4) Mammals: 

(A) Carolina northern flying squirrel 
(Glaucomys sabrinus coloratus); 

(B) Eastern cougar (Felis concolor cou- 
gar); 

(C) Gray bat (Myotis grisescens); 

(D) Indiana bat (Myotis sodalis); 

(E) Manatee (Trichechus manatus), 
when found in inland fishing 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1412 



PROPOSED RULES 



(5) 



(6) 



(F) 

lA} 

m 

ID} 

(A) 

(B) 

(C) 

(b) The 
designated 
(1) 

(2) 

(3) 
(A) 

(B) 

(C) 
(D) 
(E) 
(F) 



(G) 



(4) 
(5) 



(A) 
(B) 



waters; 

Virginia big-eared bat (Plecotus t. 

townsendii). 
Mollusks: 

Carolina heeisplitter (Lasmigona 

decorata); 

fA^ Dwarf wedge mussel 

(Alasmidonta heterodon); 

fB) Little- wing pearly mussel (Pegias 

febula); 

f€) Tar river spiny mussel (Elliptic 

[canthyria] steinstansana) . 
Reptiles: 

Atlantic ridley turtle (Lepidochelys 

kempii); 

Hawksbill turtle (Eretmochelys 

imbricata); 

Leatherback turtle (Dermochelys 

coriacea). 
following species of resident wildlife are 
as state-listed endangered species: 
Amphibians: 

Green salamander (Aneides aeneus). 
Birds: 

Bewick's wren (Thryomanes bewickii); 
Fish: 

Blotchside Logperch (Percina 

burtoni); 

Cutlips Minnow (Exoglossum 

maxillingua); 

Dusky Darter (Percina sclera); 

Orangefin Madtom (Noturus gilberti); 

Paddlefish (Polyodon spatula); 

Rustyside Sucker (Moxostoma 

hamiltoni); 

Stonecat (Noturus flavus). 
Mammals: 

None Listed At This Time 
Mollusks: 

Appalachian elktoe (Alasmidonta 

raveneliana); 

Barrel Floater (Anodonta couperiana); 



Carolina heeisplitter (Lasmigona 

decorata); 
iC) (©) Fragile 
clingmani); 

(D) (E) Green 
subviridus); 

(E) (F) Knotty 
interrupta); 

(F) fG-) Magnificent 
(Planorbella magnifica); 

(G) ^H) Neuse spike (Elliptio judithae); 
(H) fl) Pistolgrip (Tritigonia verrucosa); 
(I) (4) Slippershell mussel (Alasmidonta 



glyph (Glyphyalinia 
floater (Lasmigona 
elimia (Goniobasis 
rams-horn 



viridis); 

(J) {K) Tennessee hellsplitter (Lasmigona 

holstonia); 
(K) (fc) Tennessee pigtoe (Fusconaia 
bamesiana) . 
(6) Reptiles: 

None Listed At This Time 

Statutory Authority G.S. 113-134; 113-291.2; 
113-292; 113-333. 

lyiotice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Wildlife Re- 
sources Commission intends to amend rule cited as 
15A NCAC WD .0002. 

1 he proposed effective date of this action is May 
1, 1994. 

1 he public hearings will be conducted at 7:00 
p.m. as follows: 

District 9 

January 24. 1994 

Sylva, NC 

Courthouse 

District 8 

January 25, 1994 

Morganton, NC 

Morganton Civic Center Auditorium 

District 7 

January 26, 1994 

Elkin, NC 

High School 

District 6 

February 1, 1994 

Albemarle, NC 

North Stanley High School 

District 5 

February 2, 1994 

Graham, NC 

Courthouse 

District 4 

February 3, 1994 

Elizabethtown, NC 

Courthouse 

District 1 



i 



i 



i 



1413 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



February 7, 1994 

Edenton, NC 
Swain Auditorium 

District 2 

February 8, 1994 

New Bern, NC 

Courthouse 

District 3 

February 9, 1994 

Nashville, NC 

Courthouse 

MXeason for Proposed Action: To provide addi- 
tional access on WRC-owned gameland for persons 
with disabilities. 

Lyomment Procedures: Interested persons may 
present their views either orally or in writing at 
the hearing. In addition, the record of hearing 
will be open for receipt of written comments from 
November 1, 1993 to February 9, 1994. Such 
written comments must be delivered or mailed to 
the N. C. Wildlife Resources Commission, 512 N 
Salisbury Street, Raleigh, NC 27604-1188. 

hiditor's Note: This Rule was filed as a tempo- 
rary amendment effective October 11, 1993 for a 
period of 180 days or until the permanent rule 
becomes effective, whichever is sooner. 

CHAPTER 10 - WILDLIFE RESOURCES 
AND WATER SAFETY 

SUBCHAPTER lOD - GAME LANDS 
REGULATIONS 

,0002 GENERAL REGULATIONS 
REGARDING USE 

(a) Trespass. Entry on game lands for purposes 
other than hunting, trapping or fishing shall be as 
authorized by the landowner and there shall be no 
removal of any plants or parts thereof, or other 
materials, without the written authorization of the 
landowner. Travel is restricted, except by autho- 
rized personnel, to direct access from SR 2074 to 
the established waterfowl viewing stands on 
Cowan's Ford Waterfowl Refuge. The Wildlife 
Resources Commission may designate areas on 
game lands as either an Archery Zone, Safety 
Zone or Restricted Zone. 

(1) Archery Zone. On portions of game 



lands posted as "Archery Zones" hunt- 
ing is limited to bow and arrow hunting 
only. 

(2) Safety Zone. On portions of game 
lands posted as "Safety Zones" hunting 
is prohibited. No person shall hunt or 
discharge a firearm or bow and arrow 
within, into, or across a posted safety 
zone on any game land. 

(3) Restricted Zone. Portions of game 
lands posted as "Restricted Zones" are 
closed to all use by the general public, 
and entry upon such an area for any 
purpose is prohibited without first 
having obtained specific written approv- 
al of such entry or use from an autho- 
rized agent of the Wildlife Resources 
Commission. 

(4) Establishment of Archery and Restrict- 
ed Zones. The Commission will con- 
duct a public input meeting in the area 
where the game land is located before 
establishing any archery or restricted 
zone. After the input meeting the 
public comments will be presented to 
an oflficial Commission meeting for 
final determination. 

(b) Littering. No person shall deposit any litter, 
trash, garbage, or other refuse at any place on any 
game land except in receptacles provided for 
disposal of such refuse at designated camping and 
target-shooting areas. No garbage dumps or 
sanitary landfills shall be established on any game 
land by any person, firm, corporation, county or 
municipality, except as permitted by the landown- 
er. 

(c) Possession of Hunting Devices. It is unlaw- 
ful to possess a firearm or bow and arrow on a 
game land at any time except during the open 
hunting seasons or hunting days for game birds or 
game animals, other than fox, thereon unless said 
device is cased or not immediately available for 
use, provided that such devices may be possessed 
and used by persons participating in field trials on 
field trial areas and on target shooting areas 
designated by the landowner, and possessed in 
designated camping areas for defense of persons 
and property; and provided further that .22 caliber 
pistols with barrels not greater than seven and 
one-half inches in length and shooting only short, 
long, or long rifle ammunition may be carried as 
side arms on game lands at any time other than by 
hunters during the special bow and arrow and 
muzzle-loading firearms deer hunting seasons and 
by individuals training dogs during closed season 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1414 



PROPOSED RULES 



without field trial authorization. This Rule shall 
not prevent possession or use of a bow and arrow 
as a licensed special fishing device in those waters 
where such use is authorized. During the closed 
firearms seasons on big game (deer, bear, boar, 
wild turkey), no person shall possess a shotgun 
shell containing larger than No. 4 shot or any rifle 
or pistol larger than a .22 caliber rimfire while on 
a game land, except that shotgun shells containing 
any size steel or non-toxic shot may be used while 
waterfowl hunting. No person shall hunt with or 
have in possession any shotgun shell containing 
lead or toxic shot while hunting on any posted 
waterfowl impoundment on any game land, or 
while hunting waterfowl on Butner-Falls of Neuse 
Game Land or New Hope Game Land, except 
shotgun shells containing lead buckshot may be 
used while deer hunting, 
(d) Game Lands License 

(1) Hunting and Trapping 

(A) Requirement. Except as provided in 
Part (B) of this Subparagraph, any 
person entering upon any game land 
for the purpose of hunting, trapping, 
or participating in dog training or 
field trial activities must have in his 
possession a game lands license in 
addition to the appropriate hunting or 
trapping licenses. 

(B) Exceptions 

(i) A person under 16 years of age 
may hunt on game lands on the 
license of his parent or legal 
guardian. 

(ii) The resident and nonresident 
sportsman's licenses include game 
lands use privileges. 

(iii) Judges and nonresidents partici- 
pating in field trials under the 
circumstances set forth in Subsec- 
tion (e) of this Rule may do so 
without the game lands license. 

(iv) On the game lands listed in Rule 
.0003(d)( 1 ) of this Subchapter the 
game lands license is required 
only for hunting doves; all other 
activities are subject to the control 
of the landowners. 

(2) Trout Fishing. Any person 16 years of 
age or over, including an individual 
fishing with natural bait in the county 
of his residence, entering a game land 
for the purpose of fishing in designated 
public mountain trout waters located 
thereon must have in his possession a 



game lands license in addition to the 

regular fishing license and special trout 

license. The game lands license is not 

required to fish in that part of Slick 

Rock Creek which coincides with the 

Tennessee State line, or when fishing 

from boat on Calderwood Lake. The 

resident and nonresident sportsman's 

licenses and short-term comprehensive 

fishing licenses include trout fishing 

privileges on game lands. 

(e) Field Trials and Training Dogs. A person 

serving as judge of a field trial which, pursuant to 

a written request from the sponsoring organization, 

has been officially authorized in writing and 

scheduled for occurrence on a game land by an 

authorized representative of the Wildlife Resources 

Commission, and any nonresident participating 

therein may do so without procuring a game lands 

license, provided such nonresident has in his 

possession a valid hunting license issued by the 

state of his residence. 

Any individual or organization sponsoring a field 
trial on the Sandhills Field Trial grounds or the 
Laurinburg Fox Trial fecility shall file with the 
commission's agent an application to use the area 
and facility accompanied by a check for the facility 
use fee computed at the rate of fifty dollars 
($50.00) for each scheduled day of the trial. The 
total facility use fee will cover the period from 
12:(X) noon of the day preceding the first 
scheduled day of the trial to 10:(X) a.m. of the day 
following the last scheduled day of the trial. The 
fecility use fee must be paid for all intermediate 
days on which for any reason trials are not run but 
the building or facilities are used or occupied. A 
fee of twenty-five dollars ($25.00) per day shall be 
charged to sporting, educational, or scouting 
groups for scheduled events utilizing the club 
house only. No person or group of persons or any 
other entity shall enter or use in any manner any 
of the physical facilities located on the Laurinburg 
Fox Trial or the Sandhills Field Trial grounds 
without first having obtained specific written 
approval of such entry or use from an authorized 
agent of the Wildlife Resources Commission, and 
no such entry or use of any such facility shall 
exceed the scope of or continue beyond the 
specific approval so obtained. 

The Sandhills Field Trial facilities shall be used 
only for field trials scheduled with the approval of 
the Wildlife Resources Commission. No more 
than 16 days of field trials may be scheduled for 
occurrence on the Sandhills facilities during any 
calendar month, and no more than four days may 



1415 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



be scheduled during any calendar week; provided, 
that a field trial requiring more than four days may 
be scheduled during one week upon reduction of 
the maximum number of days allowable during 
some other week so that the monthly maximum of 
16 days is not exceeded. Before October 1 of each 
year, the North Carolina Field Trial Association or 
other organization desiring use of the Sandhills 
facilities between October 22 and November 18 
and between December 3 and March 31 must 
submit its proposed schedule of such use to the 
Wildlife Resources Commission for its consider- 
ation and approval . The use of the Sandhills Field 
Trial facilities at any time by individuals for 
training dogs is prohibited; elsewhere on the 
Sandhills Game Lands dogs may be trained only 
on Mondays, Wednesdays and Saturdays from 
October 1 through April 1. 

Dogs may not be trained or permitted to run 
unleashed between April 1 and August 15 on any 
game land located west of 1-95, except when 
participating in field trials sanctioned by the 
Wildlife Resources Commission. 

(f) Trapping. Subject to the restrictions con- 
tained in 15A NCAC lOB .0110, .0302 and .0303, 
trapping of furbearing animals is permitted on 
game lands during the applicable open seasons, 
except that trapping is prohibited: 

(1) on the field trial course of the Sandhills 
Game Land; 

(2) on the Harmon Den and Sherwood bear 
sanctuaries in Haywood County; 

(3) in posted "safety zones" located on any 
game land; 

(4) by the use of multiple sets (with an- 
chors less than 15 feet apart) or bait on 
the National Forest Lands bounded by 
the Blue Ridge Parkway on the south, 
US 276 on the north and east, and NC 
215 on the west; 

(5) on that portion of the Butner-Falls of 
Neuse Game Lands marked as the 
Penny Bend Rabbit Research area; 

(6) on Cowan's Ford Waterfowl Refuge in 
Gaston, Lincoln and Mecklenburg 
Counties; 

(7) on the Hunting Creek Swamp Water- 
fowl Refuge. 

On those areas of state-owned land known 
collectively as the Roanoke River Wetlands and 
including the Broadneck, Company Swamp, 
Conine Island, Speller-Outlaw and Urquhart tracts, 
controlled trapping is allowed under a permit 
system. For information contact the Division of 
Wildlife Management of the Wildlife Resources 



m 



Commission. 

(g) Use of Weapons. No person shall hunt or 
discharge a firearm or bow and arrow from a 
vehicle, or within 200 yards of any building or 
designated camping area, or within, into, or across 
a posted "safety zone" on any game land. No 
person shall hunt with or discharge a firearm 
within, into, or across a posted "restricted zone" 
on any game land. 

(h) Vehicular Traffic. No person shall drive a 
motorized vehicle on any game land except on 
those roads constructed and maintained for vehicu- 
lar travel and those trails posted for vehicular 
travel^ unless such person: ; provided that this 
provision shall not apply to participants 

(1) is a participant in scheduled bird dog 
field trials held on the Sandhills Game 
Landi or 

is a disabled license holder pursuant to 
G.S. 113-270.2 and G.S. 113-271 and 
the underlying basis for obtaining such 
license was limited physical mobility. 
Persons meeting this criteria may oper- 
ate electric wheelchairs and All Terrain 
Vehicles on those game lands owned by 
the Wildlife Resources Commission. 
For purposes of this Rule, the term 
"wheelchair" is defined as a device that 
is designed solely to be used by mobili- 
ty-impaired individuals for locomotion. 
The term "All Terrain Vehicle" is 
defined as those vehicles having three 
or four wheels, tire pressure of no 
more than five pounds per square inch 
and a gross vehicle weight of no more 
than 600 pounds. Notwithstanding this 
Rule, no person shall operate an elec- 
tric wheelchair, an All Terrain Vehicle, 
or any other motorized vehicle on 
wildlife plantings, high risk areas of 
erosion, dedicated nature preserves, 
other areas in which no access is per- 



mitted or in streams except at ford 
crossings. 
(i) Camping. No person shall camp on any 
game land except on an area designated by the 
landowner for camping. 

(j) Swimming. Swimming is prohibited in the 
lakes located on the Sandhills Game Land. 

Statutory Authority G.S. 113-134; 113-264; 
113-270.3; 113-291.2; 113-291.5; 113-305; 
113-306. 



8:15 



NORTH CAROLINA REGISTER 



November I, 1993 



1416 



PROPOSED RULES 



I\lotice is hereby given in accordance with G.S. 
150B-21.2 that the EHNR-Commission for Health 
Services intends to amend rule cited as 15A NCAC 
13B . 1601. 

1 he proposed effective date of this action is April 
1. 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on November 16, 1993 at the Norton Board 
Room, 6th Floor, Cooper Memorial Health Build- 
ing, 225 N. McDowell Street, Raleigh, NC. 

Keasonfor Proposed Action: To comply with the 
Federal amendment of Part 258 and allow small 
Municipal Solid Wiste Landfills (MSWLFs) a 
conditional exemption to Section .1600 require- 
ments. The amendment will also allow all 
MSWLFs that close prior to October 9, 1993, an 
extended completion date of October 9, 1994 for 
installation of a cap system. 

(comment Procedures: All persons interested in 
these matters are invited to attend the public 
hearing. V&itten comments may be presented at 
the public hearing or submitted to Brad Rutledge, 
Division of Solid Wiste Management , Solid Wiste 
Section, PO Box 27687. Raleigh, NC 27611-7687. 
All written comments must be received by 
December 1 , 1993. Persons who wish to speak at 
the hearing should contact Mr Rutledge at (919) 
733-0692. Persons who call in advance of the 
hearing will be given priority on the speaker 's list. 
Oral presentation lengths may be limited 
depending on the number of people that wish to 
speak at the public hearing. Only persons who 
have made comments at a public hearing or who 
have submitted written comments will be allowed 
to speak at the Commission meeting. Comments 
made at the Commission meeting must either 
clarify previous comments or proposed changes 
from staff pursuant to comments made during the 
public hearing process. 

IT IS VERY IMPORTANT THAT ALL INTERESTED 
AND POTENTIALLY AFFECTED PERSONS, GROUPS, 
BUSINESSES, ASSOCIATIONS, INSTITUTIONS OR 
AGENCIES MAKE THEIR VIEWS AND OPINIONS 
KNOWN TO THE COMMISSION FOR HEALTH 
SERVICES THROUGH THE PUBLIC HEARING AND 
COMMENT PROCESS. WHETHER THEY SUPPORT 
OR OPPOSE ANY OR ALL PROVISIONS OF THE 



PROPOSED RULES THE COMMISSION MAY MAKE 
CHANGES TO THE RULES AT THE COMMISSION 
MEETING IF THE CHANGES COMPLY WITH G.S 

150B-21.2(f). 

tLditor's Note: This Rule was filed as a 
temporary amendment effective October 9, 1993, 
for a period of 180 days or until the permanent 
rule becomes effective, whichever is sooner. 

CHAPTER 13 - SOLID WASTE 
MANAGEMENT 

SUBCHAPTER 13B - SOLID 
WASTE MANAGEMENT 

SECTION .1600 - REQUIREMENTS FOR 

MUNICIPAL SOLID WASTE LAIWFILL 

FACILITIES (MSWLFs) 

.1601 PURPOSE, SCOPE, AND 
APPLICABILITY 

(a) Purpose. The purpose of this Section is to 
regulate the siting, design, construction, operation, 
closure and post-closure of all municipal solid 
waste landfill facilities, MSWLFs. 

(b) Scope. This Section describes the 
performance standards, application requirements, 
and permitting procedures for all municipal solid 
waste landfill facilities. The requirements of this 
Section are intended to: 

(1) Establish the State standards for 
MSWLFs to provide for effective 
disposal practices and protect the public 
health and environment. 

(2) Coordinate other State Rules applicable 
to landfills. 

(3) Facilitate the transition for existing 
landfill facilities which continue to 
operate MSWLF units. 

(c) Applicability. Owners and operators of new 
and existing landfill facilities including a MSWLF 
unit(s) shall conform to the requirements of this 
Section as follows: 

(1) Municipal solid waste landfill units 
which did not receive solid waste after 
October 9, 1991 shall comply with the 
Solid Waste Permit, the Conditions of 
Permit, and Rule .0510. 

(2) MSWLF units that received solid waste 
after October 9, 1991 but stop receiving 
waste before October 9, 1993 shall 
comply with the Solid Waste Permit, 
the Conditions of Permit, and Rule 



1417 



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NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



I 



.0510. The cap system shall be 
installed within six month s of la s t 
receipt of wastes by October 9^ 1994 
and shall meet the criteria set forth in 
Subparagraph (c)(1) of Rule .1627 of 
this Section. Owners or operators of 
MSWLF units that foil to complete 
cover installation by this date will be 
subject to all of the requirements appli- 
cable to existing MSWLFs. 
(3) Effective dates. 

f^ £A} All MSWLF units that receive 
waste on or after October 9, 1993, 
except those units that qualify for an 
exemption as specified in Part 
(c)(3)(B) of this Rule shall comply 
with the requirements of this Section. 
(B) A MSWLF unit that meets the 
conditions in Subparts (i) through (vi) 
of this Rule is exempt from the 
requirements of Section . 1600 other 
than Rule .1627. This exemption 
shall not be effective unless the 
amendment to the federal rule 40 
CFR Part 258.1 (e)(1) and (2} 
extending the effective dates is 



\ 



\ 



ii) 



published in the Federal Register as a 

final rule. 

The MSWLF unit disposed of 100 
tons per day or less of solid waste 
between October 9^ 1991 and 
October 9, 1992. 



(ii) The MSWLF unit does not 
dispose of more than an average 
of 100 TPD of solid waste each 
month between October 9^ 1993 
and April 9. 1994. 

(iii) The MSWLF unit is not on the 
National Priorities List (NPL) as 
found in Appendix B to 40 CFR 
Part 300, which is hereby 
incorporated by reference 
including any subsequent 



amendments and additions. 
Copies of this material are 
available for inspection and may 
be obtained at the Department of 
Environment. Health, and Natural 
Resources, Division of Solid 
Waste Management. 401 Oberlin 
Road, Raleigh, N.C. at no cost, 
(iv) The MSWLF unit owner and 
operator shall notify the Division 
by November L. 1993. that they 
shall stop receiving waste at their 



MSWLF unit before April 9, 
1994. Notification to the Division 
shall include a statement of com- 



pliance with all conditions speci- 
fied in Part (c)(3)(B) of this Rule. 
Hi If the MSWLF unit is owned 
or operated by a unit of local 
government, notification shall 
be in the form of a Resolution 
adopted by the Governing 
Board. 

If the MSWLF unit is privately 
owned or o perated, the notifi- 
cation shall be executed by the 
owner and operator or in the 
case of a corporation, by a 
corporate officer with legal 
authority to bind the corpora- 
tion. All signatures shall be 
properly attested and nota- 



ffl) 



£v) 



rized. 
Waste received at 



the MSWLF 



unit shall cease prior to April 9^ 
1994. 
(vi) MSWLF units which meet all 
conditions of exemption required 
within Subparagraph (c)(3) of this 
Rule shall complete installation of 
the ca2 system in accordance with 
Subparagraph (c)(1) of Rule .1627 
of this Section by October 9^ 
1994. 
(4) MSWLF units failing to satisfy the 
requirements of this Section constitute 
open dumps, which are prohibited 
under Section 4005 of RCRA. Closure 
of open dumps that receive household 
waste shall meet the requirements of 
this Section, 
(d) The owner or operator of a MSWLF facility 
shall comply with any other applicable Federal and 
State laws, rules, regulations, or other require- 
ments. 

Statutory Authority as. 130A-294. 

TITLE 21 - OCCUPATIONAL LICENSING 
BOARDS 

I\otice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. State Board of Certified 
Public Accountant Examiners intends to adopt 
rules cited as 21 NCAC 8F .0112; 8J .0011; 8K 
.0301; 8N .0101 - .0104, .0201 - .0213, .0301 - 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1418 



PROPOSED RULES 



.0307, .0401 - .0408, amend rules cited as 21 
NCAC8A .0105, .0301, .0307 - .0309, .0315; SB 
.0202, .0502; 8F .0103, .0105. .0107, .0302, 
.0409: 8G .0401. .0406, .0409; 8H .0002, .0004; 
81 .0001, .0004; 8J .0001, .0002, .0005, .0006, 
.0008. .0010; 8K .0104. .0105. .0201; 8M .0102, 
.0201, .0301, .0304 and repeal rules cited as 21 
NCAC8F.0501; 8G .0101 - .0103, .0106- .0109, 
.01 12 -.01 14, .0201 -.0205, .0208 -.021 3, .0301 
- .0306, .0310- .0312; 8H .0003. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on December 13, 1993 at the N.C. State 
Board of CPA Examiners. 1101 Oberlin Road, 
Suite 104, Raleigh, NC 27605. 

MXeason for Proposed Action: To improve read- 
ability of professional ethics and exam rules. 
Petition by a CPA to make the rules genderless. 
N. C. General Assembly adopted on July 15, 1993, 
a new law effective October 1 , 1993, providing for 
creation of Registered Limited Liability Partner- 
ships and Limited Liability Companies through 
which CPAs could practice in this State. 

Lyomment Procedures: Any person interested in 
these Rules may present oral comments relevant to 
the action proposed at the public rule-making 
hearing or deliver written comments to the Board 
office not later than December 13, 1993. Anyone 
planning to attend the hearing should notifi,- the 
Board office by noon on December 1. 1993, 
whether they v^ish to speak on the proposal and 
whether they will speak in favor of the proposal or 
against it. Anyone speaking on the proposals will 
be limited to a total of 10 minutes. 

EdUor's Note: 21 NCAC 8K .0301 was filed as 
a temporary adoption effective October 1, 1993 
for a period of 180 days or until the permanent 
rule becomes effective, whichever is sooner. 

CHAPTER 8 - BOARD OF CERTIFIED 
PUBLIC ACCOUNTANT EXAMEVERS 

SUBCHAPTER 8A - DEPARTMENTAL 
RULES 

SECTION .0100 - ORGAMZATIONAL 



RULES 

.0105 PURPOSES AND RESPONSIBILITIES 

(a) The Board is an independent state agency, 
unlike the N.C. Association of CPAs. The agency 
is an occupational licensing board and is autho- 
rized by Chapter 93 of the N. C. General Statutes. 

(b) The Board has these primary responsibilities: 

(1) to protect the public; 

(2) to grant CPA certificates to those who 
have met legal requirements including 
age, citizenship, education, experience, 
and good moral character; 

(3) to register CPA firms; 

(4) to annually renew the certificates of 
qualifying CPAs and registered CPA 
firms; 

(5) to administer the semi-annual CR\ 
Examination; 

(6j to administer the CPE program and 

monitor compliance with the program; 
(7) to administer the SQR program and 

monitor compliance with the program; 
£8} f^ to adopt rules of professional ethics 

and conduct to be observed by CPAs in 

this state; 

(9) i%) to conduct administrative hearings 
in accordance with state statutes and 
Board rules; and 

(10) (9) to administer other provisions of 
G.S. 93. 

(c) The Board is composed of five persons who 
are CPAs and two persons who are not CPAs but 
who represent the public at large. 

(d) In North Carolina anyone can practice public 
accountancy by paying a minimal privilege license 
fee. However, anyone not licensed by the Board 
is restricted to the title "accountant." Even though 
a person holds a CPA certificate issued by another 
state, and holds a position in such fields as indus- 
try, government, or education, that person must 
obtain a North Carolina certificate in order to use 
the CPA title while in this state, subject to the 
exemptions set forth in 21 NCAC 8H .0005. 

Statutory Authority G.S. 93-12. 

SECTION .0300 - DEFINTTIONS 

.0301 DEFINITIONS 

(a) The definitions set out in G.S. 93- 1(a) shall 
apply when those defined terms are used in 21 
NCAC 8. 

(b) In addition to the definitions set out in G.S. 
93- 1 (a), the following definitions and other defini- 



1419 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



I 



> 



> 



tions in this Section apply when these terms are 
used in 21 NCAC 8: 

(1) "Active," when used to refer to the 
status of a person, describes a person 
who possesses a North Carolina certifi- 
cate of qualification and who has not 
otherwise been granted "Retired," 
"Inactive," or "Conditional" status; 

(2) "AICPA" means the American Institute 
of Certified Public Accountants; 

(3) "Applicant" means a person who has 
applied to take the CPA examination; 

(4) "Attest service" means providing: 

(A) any audit, 

(B) any review of a financial statement, 

(C) any compilation of a financial state- 
ment when the CPA expects, or rea- 
sonably might expect, that a third 
party will use the compilation and the 
CPA does not disclose a lack of inde- 
pendence, and 

(D) any examination of prospective finan- 
cial information; 

(5) "Audit" means an examination of finan- 
cial statements of a person by a CPA, 
conducted in accordance with generally 
accepted auditing standards, to deter- 
mine whether, in the CPA's opinion, 
the statements conform with generally 
accepted accounting principles or, if 
applicable, with another comprehensive 
basis of accounting; 

(6) "Board" means the North Carolina State 
Board of Certified Public Accountant 
Examiners; 

(7) "Calendar year" means the 12 months 
beginning January 1 and ending Decem- 
ber 31; 

(8) "Candidate" means a person whose 
application to take the CPA examina- 
tion has been accepted and who may sit 
for the CPA examination; 

(9) "Client" means one who orally or in 
writing agrees with a person or firm 
holding out pursuant to 21 NCAC 8A 
■0308 to receive any services included 
in 21 NCAC 8A .0307; 

(10) (9) "Commission" means compensation, 
except a referral fee, for recommending 
or referring any product or service to 
be supplied by another person; 

(1 1) ftO) "Compilation of a financial state- 
ment" means presenting in the form of 
a financial statement information that is 
the representation of any other person 



without the CPA's undertaking to ex- 
press any assurance on the statement; 

(12) f44) "Conditional," when used to refer 
to the status of a person, describes a 
person who holds a North Carolina 
certificate of qualification under certain 
conditions as imposed by the Board, 
such as additional requirements for 
failure to complete the required CPE 
hours in a calendar year; 

(13) fi3) "Contingent fee" means a fee 
established for the performance of any 
service pursuant to an arrangement in 
which no fee will be charged unless a 
specified finding or result is attained, or 
in which the amount of the fee is other- 
wise dependent upon the finding or 
result of such service; 

(14) f+^ "CPA" means certified public 
accountant; 

(15) ^44) "CPE" means continuing profes- 
sional education; 

(16) {i&^ "Disciplinary action" means revo- 
cation or suspension of, or refusal to 
grant, membership, or the imposition of 
a reprimand, probation, constructive 
comment, or any other penalty or con- 
dition; 

(17) "Disclosed" means a written statement 
of the service to be rendered with the 
contingent fee to be charged and ]s 
dated and signed by the client; 

(18) f+4) "Examination of prospective finan- 
cial information" means an evaluation 
by a CPA of: 

a forecast or projection, 
the support underlying the assump- 
tions in the forecast or projection, 
whether the presentation of the fore- 
cast or projection is in conformity 
with AICPA presentation guidelines, 
and 

whether the assumptions in the fore- 
cast or projection provide a reason- 
able basis for the forecast or projec- 
tion; 

(19) fW) "FASB" means the Financial Ac- 
counting Standards Board; 

(20) {i%j "Firm" means an individual propri- 
etor, a partnership, a professional cor- 
poration^ a professional limited liability 
company, or a registered limited liabili- 
ty partnership; 

(21) ^W) "Forecast" means prospective 
financial statements that present, to the 



(A) 
(B) 

(C) 



(D) 



8:15 



NORTH CAROLINA REGISTER 



November I, 1993 



1420 



PROPOSED RULES 



best of the responsible party's knowl- 
edge and belief, an entity's expected 
financial position, results of operations, 
and changes in financial position or 
cash flows that are based on the respon- 
sible party's assumptions reflecting 
conditions it expects to exist and the 
course of action it expects to take; 

(22) f30) "GASB" means the Governmental 
Accounting Standards Board; 

(23) (i+^ "Inactive," when used to refer to 
the status of a person, describes one 
who has voluntarily surrendered a 
certificate of qualification and who does 
not use the title "certified public ac- 
countant" nor does fee one allow anyone 
to refer to fet« them as a "certified 
public accountant," and neither he they 
nor anyone else refers to fetffl them in 
any representation as described in 21 
NCAC 8 A .0308(1.). Unrevoked inac- 
tive certificates shall be kept by the 
Board until change of status of the 
former certificate holder; 

(24) fSS) "IRS" means the Internal Revenue 
Service; 

(25) f3^ "License year" means the 12 
months beginning July 1 and ending 
June 30; 

(26) ^34) "Member of a firm" means any 
CPA who has an owner s hip interest in 
a CPA firm including owners, partners, 
and shareholders; as that term is used 
in G.S. 93-4 means any individual other 
than an assistant authorized by G.S. 
93-9 who renders or o fleers to render 
accountancy services through a regis- 
tered CPA firm; 

(27) f3§) "NASBA" means the National 
Association of State Boards of Accoun- 
tancy; 

(28) (36) "NCACPA" means the North 
Carolina Association of Certified Public 
Accountants; 

(29) (37^ "North Carolina oflice" means any 
office physically located in North Caro- 
lina; 

(30) (38) "Participating firm" means a firm 
participating in the SQR program. 
Does not include firms exempt by 
reason of 21 NCAC 8M .0102(a) or 
deemed in compliance pursuant to 21 
NCAC 8M .0104; 

(31) (39) "Person" means any natural per- 
son, corporation, partnership, profes- 



sional limited liability company, regis- 
tered limited liability partnership, unin- 
corporated association, or other entity; 

(32) (30) "Projection" means prospective 
financial statements that present, to the 
best of the responsible party's knowl- 
edge and belief, given one or more 
hypothetical assumptions, an entity's 
expected financial position, results of 
operations, and changes in financial 
position or cash flows that are based on 
the responsible party's assumptions 
reflecting conditions it expects would 
exist and the course of action it expects 
would be taken given such hypothetical 
assumptions; 

(33) (34) "Referral fee" means compensation 
for recommending or referring any 
service of a CPA to any person; 

(34) (^3) "Retired," when used to refer to 
the status of a person, describes one 
possessing a North Carolina certificate 
of qualification who does not receive 
any earned compensation for current 
personal services in any job whatsoev- 
er; however, this does not preclude 
volunteer services for which the retired 
CPA receives no direct nor indirect 
compensation so long as the retired 
CPA does not sign any documents, 
related to such services, as a CPA. 
Limited exemptions may be granted in 
the discretion of the Board only in the 
following instances when the applicant 
verifies no intent to return to active 
status and either: 

(A) the applicant performs no personal 
services related to the field of 
accounting, or 

(B) the applicant is not providing 
accounting services, is 70 years of 
age or more, and agrees not to hold 
himself oneself out as a CPA or use 
the title in connection with any type 
of service provided to the public; 

(35) (^^ "Revenue Department" means the 
North Carolina Department of Revenue; 

(36) (M) "Review" means to perform an 
inquiry and analytical procedures that 
permit a CPA to determine whether 
there is a reasonable basis for 
expressing limited assurance that there 
are no material modifications that 
should be made to financial statements 
in order for them to be in conformity 



1421 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



with generally accepted accounting 
principles or, if applicable, with 
another comprehensive basis of 
accounting; 

(37) f^ "SQR Advisory Committee" means 
the State Quality Review Advisory 
Committee to the Board; 

(38) 06) "SQR Program" means the State 
Quality Review Program of the North 
Carolina State Board of Certified Public 
Accountant Examiners; 

(39) i^ "SQR Review team" means that 
team of CPAs which reviews a firm 
pursuant to the requirements of 
Subchapter 8M. A review team may be 
comprised of one or more members; 

(40) 08) "SQR Review team captain" means 
that member of a review team who is 
responsible for the review and supervis- 
es the other members of the team; 

(41) 09) "SQR Reviewer" means a member 
of a review team including the review 
team captain; and 

(42) ^40) "Trade name" means a name used 
to designate a business enterprise. 

Statutory Authority G.S. 93-1; 93-1 2(8c). 

.0307 PRACTICE OF ACCOUNTANCY OR 
ACCOUNTING 

(a) A person is engaged in the "public practice 
of accountancy" who: 

(1) holds himself oneself out to the public 
as a certified public accountant or an 
accountant, and, 

(2) in consideration of compensation re- 
ceived or to be received, 

(3) offers to perform or does perform for 
other persons 

(4) services which involve: 

(A) preparing, auditing or verifying finan- 
cial transactions, books, accounts, or 
records, or 

(B) preparing, verifying or certifying 
financial, accounting and related 
statements intended for publication, 
including preparing tax returns, or 

(C) rendering professional services or 
assistance in or about any and all 
matters of principle or detail relating 
to accounting procedure and systems, 
or 

(D) recording, presenting or certifying 
and interpreting such service (includ- 
ing tax, consulting or management 



advisory services) through statements 

and reports, 
(b) Services, as described in Subparagraph (a)(4) 
of this Rule, may be performed on a full-time, 
part-time or temporary basis in the various ac- 
counting fields, including, but not limited to, 
public accounting, governmental or other 
not-for-profit accounting, industrial, commercial or 
financial accounting, taxation and tax-related 
matters or accounting education. 

Statutory Authority G.S. 93-1; 93-12. 

.0308 HOLDING OUT TO THE PUBLIC 

(a) The phrase "holds himself out to the public 
as a certified public accountant," as used in 
defining "public practice of accountancy" in G.S. 
93-1 (a)(5) and in these Rules, means any 
representation that a person holds a certificate of 
qualification, if that representation is made in 
connection with an offer to perform or the 
performance of accountancy services for the 
public, regardless of whether that representation is 
made by the person, someone associated with hH» 
them, or someone serving as his their agent. Any 
such representation is presumed to invite the public 
to rely upon the professional skills implied by the 
certificate in connection with the professional 
services offered to be performed or performed by 
the person. 

(b) For purposes of this Rule, a representation 
shall be deemed to include any oral or written 
communication indicating that the person holds a 
certificate, including without limitation the use of 
titles or legends on letterheads, reports, business 
cards, brochures, resumes, office signs, telephone 
directories or any other advertisements, news 
articles, publications, listings, tax return 
signatures, signatures on experience or character 
affidavits for exam or certificate applicants, 
displayed membership in CPA associations, 
displayed CPA licenses from this or any other 
state, and displayed certificates or licenses from 
other organizations which have the designation 
"CPA" or "Certified Public Accountant" by the 
licensee's name. 

(c) Faculty members licensed by the Board are 
not considered to be in the public practice of 
accountancy when they use the title "certified 
public accountant" only for identification as faculty 
members in an educational institution, for purposes 
of functioning in the capacity as such faculty 
members. 

(d) Authors licensed by the Board are not 
considered to be in the public practice of 



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1422 



PROPOSED RULES 



accountancy when they use the title "certified 
public accountant" only for identification as 
authors of books, articles or other publications, 
provided that such publications do not offer the 
performance of services or the sale of products 
(other than books, articles or other publications) of 
any kind. 

(e) Licensees are not considered to be in the 
public practice of accountancy when their licensure 
is published in licensee or society membership 
directories, or is included in the sale of mailing 
labels, or when licensure or membership status is 
confirmed. 

(f) Use of the title in the form of a disclosure, 
when a licensee is required by law to disclose the 
fact of certification as a CPA, is not "holding out" 
for the purposes of this Rule. 

Statutory Authority 93-1 (a)(5): 93-12. 

.0309 CONCENTRATION IN ACCOUNTING 

(a) A concentration in accounting must include: 

(1) at least 24 semester hours, or the 
equivalent in quarter hours, of 
undergraduate accountancy courses; 

(2) at least 16 semester hours, or the 
equivalent in quarter hours, of graduate 
accounting courses that are open 
exclusively to graduate students; or 

(3) a combination of undergraduate and 
graduate courses which would be 
equivalent to Subparagraph (1) or (2). 

(b) If an applicant has a concentration in 
accounting but does not possess a bachelor's 
degree, or does not expect to receive such a degree 
within 90 days after the last day of the CPA 
examination, then the applicant's concentration in 
accounting must include: 

(1) four courses in principles of 
accounting, 

(2) one course in cost accounting, 

(3) one course in auditing, and 

(4) one course in income tax. 

(c) In recognition of differences in the level of 
graduate and undergraduate courses, one semester 
(or quarter) hour of graduate study in accounting 
will be considered the equivalent of one and 
one-half semester (or quarter) hours of 
undergraduate study in accounting. 

(d) Up to four semester hours, or the equivalent 
in quarter hours, of graduate income tax courses 
completed in law schools may count toward the 
semester hour requirement of Paragraph (a) of this 
Rule. 

(e) Where, in the Board's discretion, an 



accounting course duplicates another course 
previously taken, only the semester (or quarter) 
hours of one of the courses will be counted in 
determining if the applicant has a concentration in 
accounting. 

(f) Accounting courses include such courses as 
principles courses at the elementary, intermediate 
and advanced levels; managerial accounting; cost 
accounting; fund accounting; auditing; and 
taxation. TTiere are many college courses offered 
that would be helpful in the practice of 
accountancy, but are not included in the definition 
of a concentration of accounting. Such courses 
include business finance, business law, business 
management, computer science, economics, and 
writing skills, accounting internships, and CPA 
exam review . 

Statutory Authority 93-12(5). 

.0315 NEW FIRM, ONGOING FIRM 

(a) When the members of a firm elect to divide 
the firm such that two or more firms are created, 
one firm may be the ongoing firm and the other 
firms may be new firms, or all may be new firms. 
The ongoing firm, if any, is the firm the members 
of which represent more than 50 percent of the 
ownership of the predecessor firm prior to the 
division. 

(b) When two or more firms merge, the 
resulting firm may be an ongoing firm (successor 
to one of the predecessor firms) or it may be a 
new firm. The resulting firm is an ongoing firm 
if any percentage of ownership greater than 50 
percent of one of the predecessor firms end up 
owning a percentage of the resulting firm greater 
than 50 percent. 

(c) For purposes of this Rule, "percentage of 
ownership" refers to the percentage of the firm 
owned aggregately by the group of firm members 
in question. Percentage of ownership is 
determined based upon the number of shares held 
by the group if the firm is incorporated a 
professional corporation or a professional limited 
liability company, or, if the firm is a partnership 
or a registered limited liability partnership , the 
percentage of capital owned by the group. 

(d) A change in an entity's form (for example, 
incorporation of what was a partnership) does not 
create a new firm. A new firm is not created by 
the addition of a member(s) not acquiring a 
percentage of ownership greater than 50 percent. 
Neither is a new firm created by the loss of a 
member(s) by retirement or death, provided the 
remaining members have purchased or are 



1423 



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PROPOSED RULES 



I 



) 



purchasing the retired or deceased members' 
ownership, regardless of whether the retired or 
deceased member(s) owned more than 50 percent 
of the firm. 
NotC! The following examples illustrate thi s Rule: 

i^ Firm A splits into B and C. While A 

was in existence, its members and the 
respective percentage of owner s hip of 

those — members — were: Smith, — 39 

percent; — Jones. — 30 — percent; — aed 
Wesson. 4 percent. — Smith and Jone s 
form firm B and Wesson practices solo 

in firm — G: Since Smith and Jones 

owned 60 percent of firm A. firm B 

will be the ongoing firm. Wesson's 

firm C is a new firm. 

(3) If all — the — partners — m — the — previous 

example had gone their separate ways, 
all three firms would have been new 
firms. 

f3) The firm of Miller and Link merges 

with the firm of Thoma s and Calaber- 
Each predecessor — finw had — twe 

partners. — It is agreed that Miller and 
Link will each own 26 percent of the 
resulting firm. — Therefore, aggregately. 
th^i' — wtH — ewH — §3 — percent — ef — the 
resulting firm. — The resulting firm is 
the successor firm to Miller and Link, 
and therefore an ongoing firm, because 
Miller and Link aggregately owned a 
percentage greater than 50 percent of 
their old firm (100 percent) and now 
aggregately own a percentage greater 
than 50 percent of the resulting firm 
(52 percent). 

(4) If three two partner firms merge and 

each new partner receives 1/6 of the 
ownership of the re s ulting firm, the 
resulting firm is a new firm, because, 
although each set of previous partners 
owned 100 percent of their old firm, no 
set — ef — previous — partners — owns — a 
percentage of the new firm greater than 
50 percent. 

Statutory Authority 93-1; 93-12(8c). 



) 



SUBCHAPTER 8B - RULE-MAKING 
PROCEDURES 

SECTION .0200 - NOTICE 

.0202 MAILING LIST 

(a) Any person or agency desiring to be placed 



on the mailing list for the Board's rule-making 
notices issued pursuant to G.S. 150B 12 1508-21. 2 
may file a request in writing, furnishing km their 
or its name and mailing address to the Executive 
Director of the Board, at the address set forth in 
21 NCAC 8A .0102. 

(b) The request should state the subject areas 
within the authority of the agency for which notice 
is requested. 

Statutory Authority 93-12; 150B-21.2. 

SECTION .0500 - DECLARATORY 
RULINGS 

.0502 CONTENTS OF REQUEST 

All requests for a declaratory ruling must include 
the following information: 

(1) name and address of petitioner; 

(2) statute or rule to which the petition 
relates; 

(3) concise statement of the manner in which 
the petitioner is aggrieved, as defined in 
G.S. 1508-2(6), or thinks that fee one 
may be injured by the rule or statute and 
its application to feiia them ; and 

(4) statement of whether an oral hearing is 
desired and if so the reasons for such an 
oral hearing. 

Statutory Authority 93-12; 150B-4. 

SUBCHAPTER 8F - REQUIREMENTS FOR 

CERTIFIED PUBLIC ACCOUNTANT 

EXAMINATION AND CERTIFICATE 

APPLICANTS 

SECTION .0100 - GENERAL PROVISIONS 

.0103 FILING OF EXAMINATION 
APPLICATIONS AND FEES 

(a) All applications for CPA examinations must 
be filed with the Board, accompanied by a check 
for the amount of the examination fee and made 
payable to the "Board of CPA Examiners." The 
Board sets the fee for each examination at the 
amount that enables the Board to recover its costs 
in administering the examination. If a check fails 
to clear the bank, the application shall be deemed 
incomplete and returned. 

(b) Completed applications shall be postmarked 
with proper postage not later than the last day of 
February for the spring examination, and not later 
than the last day of August for the fall 
examination, unless one of those dates falls on a 



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1424 



PROPOSED RULES 



weekend or federal holiday, in which case the 
application must be postmarked or received in the 
Board office on the next business day. Only a 
U.S. Postal Service cancellation will be considered 
as the postmark. 

(c) The initial application filed to take the 
examination must include supporting 
documentation demonstrating that all legal 
requirements have been met, such as: 

(1) minimum legal age; 

(2) United States citizenship; 

0) rcsidoncc — er — domicile — m — North 

Carolina; 

(3) (4) education; 

(4) f#) experience, if required in order to 
qualify for the examination; and 

(5) {€j good moral character. 

(d) Any person bom outside the United States 
must furnish to the Board office evidence of 
citizenship; evidence of resident alien status; or 

(1) other bona fide evidence that the 
applicant is legally allowed to remain in 
the United States for the purposes of 
becoming a U.S. citizen, aed or 

(2) a notarized affidavit of intention to 
become a U.S. citizen^, or 

(3) evidence that the applicant is a citizen 
of a foreign jurisdiction which extends 
to citizens of this state like or similar 
privileges to be examined. 

(e) Official transcripts (originals - not 
photocopies) signed by the college registrar and 
bearing the college seal are required to prove 
education and degree requirements. A letter from 
the college registrar of the school may be filed as 
documentation that the applicant has met the 
graduation requirements if the degree has not been 
awarded and/or posted to the transcript. However, 
no examination grades will be released until an 
official transcript is filed confirming the 
information supplied in the college registrar's 
letter. All applicants submitting transcripts from 
foreign schools for consideration of degree and/or 
of meeting accountancy course requirements must 
have had the transcript{s) evaluated by a 
Board-approved educational evaluation service. 
Applicants are responsible for determining that 
their transcripts contain all information required by 
these Rules. 

(f) If experience is required to qualify for 
examination, affidavits must be prepared and 
signed by employers on forms supplied by the 
Board. 

(g) In order to document good moral character 
as required by Subparagraph (c)(6) of this Rule, 



three certificates of good moral character signed 
by persons not related by blood or marriage to the 
applicant shall accompany the application. 

(h) All applications for re-examination must be 
accompanied by three new certificates of moral 
character. No additional statements and affidavits 
regarding experience and education will be 
required for applications for re-examination. 

(i) An applicant shall include as part of any 
application for the CR\ examination a statement of 
explanation and a certified copy of court records if 
the applicant has been convicted or found guilty of 
or pleaded nolo contendere to any felony, or to 
any other criminal ofi^ense of which an essential 
element is: 

(1) dishonesty, deceit, or fraud; 

(2) violation of a federal or state tax law; 
or 

(3) commission of any act or conduct 
discreditable to the accountancy 
profession in violation of the Rules of 
Professional Ethics and Conduct for 
Certified Public Accountants, unless 
such information has been furnished in 
a previous application filed with the 
Board. 

(j) If an applicant has been denied any license 
by any state or federal agency, the applicant shall 
include as part of b« their application for the CPA 
examination a statement explaining such denial. 
An applicant shall include a statement of 
explanation and a certified copy of applicable 
license records if the applicant has been registered 
with or licensed by a state or federal agency and 
has been disciplined by that agency. 

(k) Two recent identical photographs must 
accompany the application for the CPA 
examination. These photographs should be taken 
within the last six months. The photographs 
should be of the applicant alone, 2x2 inches in 
size, with an image size from the bottom of the 
chin to the top of the head, including hair, of 
between I and 1-3/8 inches. Photographs must be 
clear, front view, full face, taken in normal street 
attire without a hat or dark glasses, and printed on 
thin paper with a plain light background. They 
must be capable of withstanding a mounting 
temperature of 225 degrees Fahrenheit (107 
degrees Celsius). TTiey may be in black and white 
or in color. Snapshots, most vending-machine 
prints, and magazine or full-length photographs are 
unacceptable. Photographs retouched so that the 
applicant's appearance is changed are 
unacceptable. Applicants shall write their names 
on the back of their photos. 



1425 



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PROPOSED RULES 



I 



> 



> 



(1) If an applicant's name has legally changed 
and is difiFerent from the name on any transcript or 
other document supplied to the Board, the 
applicant shall furnish copies of the documents 
legally authorizing the name change. 

Statutory Authority 93-12(3); 93-12(4); 93-12(5). 

.0105 CONDITIONING REQUIREMENTS 

(a) — The following provisions shall apply to all 
persons who arc approved to take the examination 
prior to the examination scheduled for May 199 4 : 

{\) A candidate subject to examination in 

all section s who receives a grade of 75 
or higher in each of the four sections of 
the examination shall have pa ss ed the 
examination. 

(3) A — candidate — who — is — subject — te 

examination — m — aH — section s — ef — the 
examination and who receives a grade 
of 75 or higher in two or more section s 
or the combined sections of accounting 
practice — of — wbe — js — net — subject — te 
examination — tfl — aH — s ection s — ef — the 
examination and who receives a grade 
of 75 — &f — higher — m — any — remaining 
section, shall receive conditional credit 
for the sections in which he receive s a 
grade of 75 or higher and shall not be 
subject to examination in tho s e sections 
a s long as the conditional credit remains 
unexpired. 

{%) A candidate receiving conditional credit 

as provided for under Subparagraph (2) 
of Paragraph — (a) of this — Rule shall 
retain credit for a period of not more 
than — frve — succeeding — examinations 
offered by the Board, at which time the 

conditional — credit expires. For the 

period during which an applicant who 
was or is in active military service any 
time subsequent to receiving conditional 
credit, — »«iy — those — examination s — fef 
which that applicant has applied and has 
been approved shall be considered as 
succeeding examinations, 
(b) EfiFectivc with the May 199 4 examination: 

t+^ A candidate who has been awarded 

conditional credit for the accounting 
practice — section — shaH — be — awarded 
conditional — credit — fer — the — proposed 
accounting — and — reporting — s ection, 
pursuant — te — Subparagraph — (5^ — ef 
Paragraph (a) of this Rule, and s hall 
retain such credit until he passe s the 



^^ 



remaining — sections of — ttfrttl the 

conditional status of such credit expires, 

whichever occurs first. 

A candidate who has been awarded 



conditional credit for cither the auditing 
or the business law (renamed business 
law — and — professional — responsibilities) 

section, ef both, pur s uant te 

Subparagraph (2) of Paragraph (a) of 
this Rule, shall retain such credit until 
he passes — the remaining sections or 
HHtH — the — conditional — statu s — of s uch 
credit expires, whichever occurs first. 
A candidate who has been awarded 



f^ 



conditional credit for the accounting 

theory section, pursuant — te 

Subparagraph (2) of Paragraph (a) of 
this Rule, shall be awarded conditional 



credit — fef — the — proposed — fif 



al 



inanci 

accounting and reporting section and 

shall retain such credit until he passes 

the — remaining — sections — ef — imttl — the 

conditional status of such credit expire s , 

whichever occurs first. 

fe) — The following provisions shall apply to all 

persons who are approved to take the examination 

beginning with the May 199 4 examination: 

{V) In order to pass the examination, — a 

candidate s hall be required to pass all 
sections — of the — examination — v«4th — a 
grade of 75 or higher. 

f3) A candidate who passes all sections of 

the examination in one s itting shall have 
passed the examination. — A candidate 
who is subject to examination in all 
sections of the examination and who 
pas s es two or more, but not all sections 
of the examination, — ef — whe — is — net 
s ubject to examination in all sections of 
the examination and who passes any 

remaining section s hall receive 

conditional credit for those sections that 

he has passed and shall not be subject 

to examination in tho s e s ections as long 

as — the — conditional — credit — remains 

unexpired, provided that the candidate: 

fA) — had — taken — aH — sections — ef — the 

examination to which he wa s s ubject 

to examination at that s itting; and 

fB) — attained a minimum grade of 50 on 

each section not passed at that sitting. 

(3-) A candidate receiving conditional credit 

a s provided for under Paragraph (b) or 
Subparagraph (2) of Paragraph (c) of 
thi s Rule shall retain such conditional 



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November I, 1993 



1426 



PROPOSED RULES 



NOTE: 



credit for a period of not more than the 
six succeeding examinations offered by 
the Board subsequent to the examine 
tion for which the conditional credit 
was given, at which time the condition 

al credit expires. For the period dur 

ing which an applicant who was or is in 
active military service any time subsc 
qucnt to receiving conditional credit, 
only those examinations for which that 
applicant — has — applied — afid — has been 
approved shall be considered as sue 
cccding examinations. 
- Pursuant to 21 NCAC 8F .0103. an 



applicant must apply for each examination for 
which he sits. — TTiereforc. the provisions of Para 
graph (a) of this Rule will no longer apply to any 
applicant after the November 1993 examination. 
Beginning with the May 199 4 examination. Para 
graph (c) of this Rule will apply to all applicants, 
even those who were approved to sit for an exami 
nation prior to that time. 

(a) Passing Grades. A candidate shall be re- 
quired to pass all sections of the examination with 
a grade of 75 or higher. 

(b) Conditional Credit. If a candidate does not 
pass all of the sections in one sitting, conditional 
credit can be retained for passed sections subject to 
the following: 

(1) No conditional credit can be retained 
until the candidate has first passed at 
least two sections in one sitting; 

(2) To receive conditional credit for any 
section the candidate must sit for and 
make a grade of at least 50 on all un- 
passed sections; and 

(3) The conditional credit is good through 
the six succeeding times the exam js 
offered by the Board. 

(c) Military Service. A candidate who was or is 
in active military service after receiving condi- 
tional credit shall have only those exams for which 
they apply and are a pproved during active military 
service counted as succeeding examinations. 

(d) Section Equivalency. For purposes of condi- 
tional credit, the following pre- and post-May 
1994 exam sections are equivalent: 

( 1 ) accounting practice equals accounting 
and reporting; 
accounting theory equals financial 



(2) 
(4) 



accounting and reporting; 
auditing equals auditing; and 
business law equals business law and 
professional responsibilities. 



Statutory Authority 93-12(3); 93-12(4); 93-12(5). 

.0107 COMMUMCATION OF RESULTS OF 
CPA EXAMINATIONS 

(a) The Board will communicate to each candi- 
date in writing the result achieved in each of bis 
their examinations. Numerical grades awarded to 
candidates will not be released to third parties 
except by written consent of the candidate. 

(b) In no event will any information concerning 
answers of candidates be given to anyone other 
than the candidate. 

(c) Examination grades shall be mailed on the 
uniform national release date agreed to with the 
NASBA and the AICPA. However, candidates 
may receive their grades personally at the oflices 
of the Board on the release date by notifying the 
Executive Director in writing not later than five 
days prior to the release date. 

(d) Information prepared by the Board's staff 
about the results of the examination and intended 
for public information shall be made available no 
earlier than the day after the uniform national 
release date. 

Statutory Authority 93-12(2); 93-12(3). 



CANDIDATE'S REQUEST TO SIT IN 
ANOTHER JURISDICTION 

The Board may allow a North Carolina 



.0112 

ia] 

candidate to proctor the exam in another jurisdic- 
tion, provided such request is not submitted for the 
purpose of avoiding the requirements of that 
jurisdiction. 

(b) The proctoring request shall accompany the 
examination application and must be approved by 
the proctoring jurisdiction. 

(c) The approval of the proctoring request shall 
be in the discretion of the Board. 

Statutory Authority 93-12. 

SECTION .0300 - EDUCATIONAL 
REQUIREMENTS FOR EXAMINATION 

.0302 EDUCATION AND WORK 

EXPERIENCE REQUIRED PRIOR TO 
CPA EXAM 

(a) Under G.S. 93-12(5) there are three ways an 
applicant for the CPA examination can 
demonstrate the possession of sufficient education 
to become a CPA: 

(1) the possession of a bachelor's degree in 
any subject, from a regionally 
accredited college or university, that 



1427 



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PROPOSED RULES 



either includes or is supplemented by a 
concentration in accounting as defined 
in 21 NCAC 8 A .0309; 

(2) two years of college at a regionally 
accredited college or university plus 
two years of experience in the public 
practice of accountancy under the direct 
supervision of a CPA; and 

(3) compliance with the requirements set 
forth in 21 NCAC 8F .0304, which 
provides for special examinations in 
lieu of formal education. 

(b) Applicants who intend to demonstrate their 
possession of sufficient education to become a 
CPA by showing that they possess either a 
bachelor's degree or two years of college must 
submit official transcripts with their application to 
take the CPA examination. Official transcripts 
shall show the grades the applicant received on 
courses completed and shall also show degrees 
awarded. An official transcript bears the seal of 
the school and the signature of the registrar or 
other appropriate official. 

(c) With regard to Paragraph (a)(1) of this Rule, 
the Board may approve an application to take the 
CPA examination prior to the receipt of a 
bachelor's degree, if: 

(1) the concentration in accounting which 
will be included in or supplement the 
bachelor's degree is already complete 
or is reasonably expected to be 
completed by the end of the school 
term within which the examination 
falls; and 

(2) an applicant reasonably expects to 
receive the bachelor's degree within 90 
days after the last day of the 
examination. 

However, if the applicant fails to receive the 
degree within the specified time, the CPA 
examination grades shall not be released and if the 
applicant wishes to retake the examination, he they 
must reapply. 

(d) With regard to Paragraph (a)(2) of this Rule, 
the completion of two years in an accredited 
college or university or its equivalent means that 
the applicant has successfully completed, or 
reasonably expects to complete at the end of the 
school term within which the examination falls, at 
least 60 semester hours of course work, or the 
equivalent in quarter hours, in a school, college, 
or university accredited by a regional accrediting 
association. The 60 semester hours must include 
a concentration in accounting as defined in 21 
NCAC 8A .0309. However, if the applicant fails 



to complete the necessary semester hours by the 
end of the school term within which the 
examination falls, the examination grades shall not 
be released and if the applicant wishes to retake 
the examination, be they must reapply. 

(e) With regard to Paragraph (a)(2) of this Rule, 
the provisions set forth in 21 NCAC 8F .0401 
regarding work experience apply to these two 
years of experience. 

(f) With regard to Paragraph (a)(3) of this Rule, 
the applicant must complete the work experience 
that is required by all candidates for certification, 
and set forth in 21 NCAC 8F .0401, prior to the 
date the applicant applies for the CPA examina- 
tion. 

Statutory Authority 93-12(3); 93-12(5). 

SECTION .0400 - EXPERIENCE 

.0409 SATISFACTION OF EXPERIENCE 
REQUIREMENT BY TEACHING 

(a) Teaching Experience. The requirement of 
"five years experience teaching accounting," G.S. 
93-12(5), means teaching accounting full-time for 
five years. 

(1) Full-time teaching as described by the 
rules of the educational institution 
where the applicant taught will be 
accepted by the Board to be full-time 
teaching. However, in no case will less 
than 12 semester hours, or the equiva- 
lent, be accepted by the Board as 
full-time teaching. 

(2) If the applicant has not taught 
accounting full-time for five years, 
credit will be allowed by the Board for 
teaching accounting less than full-time 
on a pro rata basis based upon the 
number of semester hours required for 
full-time teaching at the educational 
institution where the applicant taught. 
However, in no case can an applicant 
receive credit for a full-time teaching 
year for teaching done in less than one 
academic year or more credit than one 
full-time teaching year for teaching 
done within one calendar year. 

(3) Courses outside the field of accounting 
will not be counted toward full-time 
teaching. Such courses include, but are 
not limited to: business law, finance, 
computer applications, personnel 
management, economics and statistics. 

(4) Of the five years of full-time teaching 



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1428 



PROPOSED RULES 



experience, teaching accounting 
principles (below intermediate 
accounting) cannot be counted toward 
the educational requirement for more 
than the equivalent of two full-time 
years. The remaining three full-time 
teaching years must be taught in at least 
two different areas of advanced 
accounting such as auditing, income 
tax, intermediate financial accounting or 
advanced managerial accounting, and 
the applicant must have taught at least 
nine semester hours, or the equivalent, 
in at least two of the different areas. 
The purpose of this Subparagraph is to 
render unacceptable as meaningful 
experience both the continuous teaching 
of the elementary accounting course and 
the continuous teaching of the advanced 
courses in only one area of accounting. 

(b) Required Information. The applicant must 
submit with his their application a letter from each 
institution where he they taught, certified by the 
applicant's dean or department head at that 
institution. The letter must state: 

(1) the number of credit hours which the 
applicant taught each year; 

(2) the names and academic level of the 
courses taught; and 

(3) the number of hours set by the rules of 
the institution as ftill-time teaching for 
each relevant year. 

(c) Burden of Proof. An applicant having taught 
in an accredited community college or technical 
institute has the burden of proving that the credits 
earned by students taking those courses which the 
applicant taught would transfer to a four-year 
accredited college or university. 

Statutory Authority 93-12(5). 

SECTION .0500 - APPLICATIONS FOR 
CERTIFICATES 

.0501 RESIDENCY 

The residency requirement in G.S. 93 12(5) must 
fee^ — met — either — immediately — before — filing — aft 
application to receive a certificate of qualification 
or immediately before filing an application to take 
the examination. 

Statutory Authority 93-10; 93-12(5); 93-12(6); 
93-12(7a). 

SUBCHAPTER 8G - CONTINUING 



PROFESSIONAL EDUCATION (CPE) 

SECTION .0100 - GEIVERAL PROVISIONS 

.0101 COMPLIANCE WITH BOARD RULES 
OF PROFESSIONAL 
ETHICS/CONDUCT 

(a) — The reliance of the public and the busines s 
community on s ound financial reporting and advice 
on business affairs imposes on the accounting 
profession an obligation to maintain high standards 
of technical comp)ctcncc. morality and integrity. 
To this end, a CPA shall at all times maintain 
independence of thought and action, — hold the 
affairs of his clients in strict confidence, strive 
continuously to improve hi s professional skills, 
observe generally accepted accounting principles 
and standards, — promote s ound and informative 
financial reporting, uphold the dignity and honor 
of the accounting profession, and maintain high 
standards of personal conduct. 

(fe) — Acceptance of licensure as a CPA implie s 
that the licensee has assumed an obligation to be 
diligent — tfl — the — performance — of — professional 
services; to be fair and honest in relations with 
clients, — fellow practitioners — and the public; — te 
exhibit a proper appreciation of his duties to the 
community and state; and to comply with these 
Rules. — Anyone authorized to use the title "CPA" 
in dealing with the public must inform the public 
that they are licensed by this Board. 

^e) Tbe — Rules — of Professional — Ethics — aftd 

Conduct presuppose that di s ciplinary asses s ment of 
a CPA's conduct will be made on the basis of the 
facts and circumstances as they existed at the time 
of the conduct in que s tion. — Moreover, the rules 
presuppose — that — both — the — decision — te — take 
disciplinary action and the severity of such action 
depend on all of these facts and circumstances, 
including the willfulness and seriousnes s of the 
violation, — any — extenuating — factors, — aftd — aey 
previous violations. — In interpreting the rules, one 
should keep in mind that they cover a broad range 
of behavior; consequently, they do not specifically 
enumerate every possible unethical act. 

fd) The — Rules — of Professional — Ethics — and 

Conduct apply to all services performed in th e 
practice of public accountancy, including tax and 
management advisory services, except: 

f4^ where the wording of a rule indicates 

otherwise; 

(3) when a CPA is practicing outside th e 

s tate — ef — North — Carolina — aftd — net 
rendering s ervices for North Carolina 
clients, and consequently, is not subject 



1429 



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PROPOSED RULES 



to discipline for departing from any of 
the rules atatcd herein, as long as hi s 
conduct is in accord with the s tatutes 
afid — rules — ef — the — state, — district — er 
territory' of the United States in which 
he i s practicing; or 

i^ when a CPA is practicing outside the 

United States and, consequently, is not 

subject to discipline for departing from 

any of the rules stated herein, as long 

as his conduct is in accord with the 

rules — ef — the — organized — accounting 

profession in the country in which he is 

practicing. — However, when a CPA is 

a s sociated with financial statements in 

such a manner as to imply that he i s 

acting — as — oh — indep>endent — public 

accountant and under circumstances that 

would entitle the reader to assume that 

United States practices were followed, 

he must comply with the requirements 

of rules in Section 8G .0200. 

(e3 — The violation of any of these Rules by any 

pKsrson associated with a CPA in the practice of 

public accountancy who is cither under the CPA's 

supervision, — er — the — CPA's — partner — er — fellow 

s hareholder, will be deemed to be a violation of 

the rule by the CPA unless the CPA exerci s ed 

propHjr supervision, when required by these Rules, 

and neither knew nor had reason to know of the 

violation. 

(f) — A CPA shall not permit others to carry out 
on his behalf, with or without compensation, acts 
which if carried out by the CPA would be a 
violation of these Rules. 

fg) — In the interpretation and enforcement of 
these Rules, the Board will give con s ideration, but 
net — necessarily — dispositive — weight, — te — relevant 
interpretations, rulings and opinions issued by the 
board s of other juri s dictions and by appropriately 
authorized — ethic s — committees — ©f — professional 
organizations. 



m- 



Subchaptcr; 

knowingly assisting or inducing another 



Statutory Authority G.S. 558-1 2; 93-12(9). 

.0102 DISCREDITABLE CONDUCT 

(ft) A — CPA — shall — net — engage — m — conduct 

discreditable — (© — the — accountancy — profe ss ion. 
Discreditable conduct includes acts of professional 
misconduct and acts that are false, misleading, 
dishonest or deceptive. 

(b) — Profes s ional misconduct includes but is not 
limited to: 

t4-) attempting 



to violate or attempt to violate the 
rule s , or doing so through the acts of 
another; 

^ acts that reflect adver s ely on the CPAs 

hone s ty, integrity, trustworthiness, 

good moral character or fitness as a 
CPA in other respKicts; 

(4) stating — or — implying — an — ability — t© 

improperly — influence a governmental 
agency or official; 

(5) failing to fully cooperate with the Board 

in connection with any inquiry it shall 
make, including failing to claim mail 
from — the — UrS: — Postal — Service — and 
responding completely and promptly to 
aH — inquiries — hf — the — Board — or — its 
representatives; 

(6) discriminating in employment practices 

based on race, — color, — religion, — s^t^ 
national origin or handicap; 

f?) failing to comply with any disciplinary 



f«^ 



order i s sued by the Board; 
failing te p>erform services 



accordance with the conditions, terms 

ei= prerequisites ©f a public 

communication, quotation, engagement 
agreement, or contract. 

(9) regarding an invitation for competitive 

bids — on — atte s t — s ervice s , — it — shall — be 
discreditable for a CPA or CPA firm to 
knowingly — off^cr — te — perform — said 
services below cost for the purpo s es of 
injuring — of — destroying — competition; 
provided, it shall not be a violation to 
do so in order to meet competition. 
Nothing herein shall be construed to 

prohibit — competitive bidding ner 

establishe s a minimum price of any 
CPA services. 
False, misleading, dishonest or deceptive 



{&) — halse, misleadmg, dis 
acts include, but are not limited to 
decepti 



W- 



-te — violate — the — Rules — ef 



Professional Ethics and Conduct in this 



u s mg — deceptive — representations — m 

connection with s ervices performed; 
{3) asserting — that — services — are — ef — a 

particular standard when they arc not; 
03 disparaging the accounting s ervices or 

bu s iness of another by false, mi s leading 

or deceptive representation s of fact; 
i4) misrepresenting — feets — ©f — failing — t© 

disclose relevant fact s ; 
(#) creating false or unjustified expectations 

of favorable results; 
f6) implying — abilitie s — net — s upported — by 



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1430 



PROPOSED RULES 



valid education, profe ss ional 

attainments or licensing recognition; or 

f7) providing false »f misleading 

information ofl tb« qualifying 

cxpKirience — ef — aH — applicant — fef — a 
certificate of qualification. 

Statutory Authority G.S. 55B-12; 93-12(9). 

.0103 DISCIPLINE BY FEDERAL AND 
STATE AGENCIES OR BOARDS 

A CPA shall not act in a vtny that would cause 
him to be disciplined by federal or s tate agencies 
or boards. 

Statutory Authority G.S. 55B-12: 93-12(9). 

.0106 VIOLATION OF TAX LAWS 

A CPA shall not knowingly violate any state or 
federal tax lav i 's in handling his personal business 
affair s . — the busine s s affairs of a client or the 
business afl'airs of a company or corporation of 
which he is owner or part owner. 

Statutory Authority G.S. 93-12(9). 

.0107 INDEPENDENCE 

{et) — A CPA, or his firm, who is performing an 
engagement in which the CPA, or his firm, will 
issue a report on financial statements of any client 
(other than a report in which lack of independence 
is disclosed) must be independent v»'ith respect to 
the client in fact and appearance. 

ffe) — Independence is impaired if, for example, 
during the period of the professional engagement, 
or at the time of issuing th e report, the CPA or hi s 
firm: 

{^ had or was committed to acquire any 

direct — er — material — indirect — financial 
intere s t in the client; 

^3^ vv'as a trustee of any trust or executor or 

administrator of any e s tate that had or 
was committed to acquire any direct or 
material indirect financial intere s t in the 
client; 

f^) had any joint or closely held business 

inve s tment — with — ^ett — client — ©f — any 

officer, dir e ctor «-f principal 

stockholder thereof which was material 
m — relation — (© — the — net — worth of the 
client, the CPA or his firm; or 

{4^ had any loan to or from the client or 

any — officer, — director — &f — principal 
s tockholder thereof other than loans of 
the following kinds made by a financial 



institution under normal lending 

procedures, terms and requirements: 
{iPr) — loans ctJtained by the CPA or his firm 
which are not material in relation to 
the net worth of the borrower; 
fB) — home mortgages; and 
^G) — other — secured — loans, — except — those 
secured solely by a guarantee of the 
CPA or hi s firm. 
fe) — Independence will also be considered to be 
impaired if, — during the period covered by the 
financial — statements, — during — the period of the 
professional engagement or at the time of issuing 
the report, the CPA: 

f4^ was connected with the client as a 

promoter, underwriter, — voting trustee, 
director, — officer — ©f — m — eesf — capacity 
equivalent — to — that — of a — member — ef 
management or of an employee; or 

^3) was — a — trustee — fef — any — pension — ©f 

profit sharing trust of the client. 
{4^ — The examples in this Rule are not intended 
to be all inclusive. 

Statutory Authority G.S. 55B-12; 93-12(9). 

.0108 INTEGRITY AND OBJECTIVITY 

(a) A CPA shall not subordinate his judgment to 
others when engaged in the practice of public 
accounting, — including the rend e ring of tax and 
management advisory services. 

ibj — In tax practice, he may re s olve doubt in 
favor of his client as long as there is reasonable 
support for his position. 

Statutory Authority G.S 553-12; 93-12(9). 

.0109 COMPETENCE 

A — GB^ — sbaH — comply — with — the — following 
standards : 

{\) He shftH undertake ©ftiy those 

engagements which he or his firm can 

reasonably — expect — te — complete — with 

professional comp)ctenee; 
f3) He shall exercise due profe ss ional care 

in the performance of an engagement; 
0-) He shall adequately plan and supervise 

an engagement; and 
(4) He shall obtain sufficient relevant data 

te — afford — a — reasonable — basis — fef 

conclusions — or — recommendations — m 

relation to an engagement. 

Statutory Authority G.S. 55B-12: 93-12(9). 



1431 



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PROPOSED RULES 



I 



^ 



I 



.0112 DISCIPLINARY ACTIONS FOR 
VIOLATIONS 

(a) — Any person or firm having violated any 
accountancy statute or rule of this Board may be 
subjected for each s uch violation to any of the 
following disciplinary actions or a combination of 

9uCil . 

i^ Unpublished — Reprimand issued 

without prejudice to the rights of the 
CPA or firm to practice. — It require s 
Board action and is premi s ed upon the 
Board's assumption that a violation has 
occurred. The reprimand is kept in the 
GPAt — Of — fifffi — file — afld — may — be 
considered as evidence bearing on the 
willfulness — ef — any — allegation — ef 
subsequent violation s of the same rule 
or s tatute 

{3) Conditional Unpublished Reprimand — 

same as unpublished reprimand, but i s 
conditioned upon the CPA's or firm's 
agreement to meet certain additional 
requircmcnta, — such as extra CPE or 
third party review of work product for 
a particular period of time. 

f3^ Censure — issued upon determination by 

the Board that a violation has occurred. 
Censure is a judgment or resolution 
condemning a person for misconduct; 
s pecifically, it is an official expre ss ion 
of disapproval passed by the Board. 
The censure is publi s hed in the Board's 
new s letter and is announced to various 
governmental agencies, association s and 
others requesting to be advised of the 
Board's actions. — Although the right to 
practice — is — net — directly — impaired, 
privileges in professional associations 
may be adversely affected. 

f4) Conditional Censure — s ame as censure 

but the right to continue to practice is 
conditioned — upon — compliance — with 
additional requirements, such as extra 
CPE or third party review of work 
product for a particular period of time. 

^§) Civil penalty may be assessed in 

amounts of up to one thousand dollars 
($1,000) per violation, as determined 
by the Board. — The amount of the civil 
penalty is based on the number and 
severity of the violations. Privileges in 
professional associations are usually not 
afl'cctcd, nor is the right to use the 

GPA — title — affected. Civil — penaltie s 

assessed arc made public in the same 



manner as a censure. 

f6) Suspension is — a — revocation — fer — a 

specified period of time. — A suspen s ion 
is published in the Board' s newsletter 
and is announced in the same manner as 

a — censure It — meef — result — m — a 

suspension — of privileges — te — practice 
before governmental agencies such as 
the IRS and the Revenue Department. 
Memberships in associations may bo 
terminated along with the ability to 
participate in group insurance plan s . 
Former CPAs may be reinstated after a 
specific period of time if the CPA has 
met any conditions imposed by the 
Board at the time of suspension. 

f7) Revocation is permanent unless a 

fHjrson — who s e — certificate — is — revoked 
applies — fef — afid — is — granted — a — new 
certificate of qualification pursuant to 
21 NCAC 81 .000 4 . A revocation is 
publi s hed and announced in the same 
manner as a censure or suspension. — A 
revocation may result in suspension of 
privileges to practice before the IRS 

afid th« Revenue Department. 

Memberships in associations may be 
terminated along with the ability to 
participate in group insurance plans. — A 
GPA — employed — by — a — professional 
corporation must terminate employment 
and sever all financial interests in the 
professional corporation. 

f8) Consent — Agreement is — a — formal 

agreement signed by the Board and the 
CPA containing terms to which the two 
parties agree. — A consent agreement i s 
customarily — entered — mte — when — the 
Board desire s to impose, and the CPA 
wishes to receive, di s ciplinary action 
other than that specifically provided in 
the statutes or rules, and it is de s irable 
to avoid a full hearing. 

^ Probation the Board may suspend a 

penalty and permit the CPA to continue 
te — practice — but — place — the — Gft^ — ©n 
probation for a specific period of time 

and — under — certain — conditions. The 

suspension — ef — the — penalty — wtH — be 
removed if any condition is violated. 
fb) — The Board may publish or announce the 
disciplinary action again s t a CPA in such manner 
and for such period as it deems appropriate 

Statutory Authority G. S. 55B-12; 93-12(9). 



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1432 



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PROPOSED RULES 



.0113 REPORTING CONVICTIONS, 

JUDGMENTS AND DISCIPLINARY 
ACTIONS 

(q) a CPA shall notify the Board within 30 days 
of any — conviction — ef — finding — of guilt — ©f; — »r 
pleading of nolo contendere to: 

f4^ a felony; or 

^3) any crime an essential clement of which 

is dishonesty, deceit, fraud, a violation 
©f — fedefftl — ef — state — ta?t — law; — ©f — a 
violation of the Rules of Professional 
Ethics and Conduct contained in this 
Subchapter. 

(b) A CPA shall notify the Board within 30 days 
of any judgment or settlement in a civil suit, the 
basis of which i s grounded upon an allegation of 

gross negligence. dishonesty. fraud, 

mi s representation, incompetency, or violation of 
any federal or s tate tax law and which v»txs brought 
against cither the CPA or a firm by which the 
CPA was employed or of which the CPA v^ns a 
member. 

(c) A CPA shall notify the Board within 30 days 
of a suspension of, or di s cipline concerning, a 
professional — license — ©f — ecrtificate, — including — a 
license to practice law or to practice before any 
s tate or federal agency, s uch as the IRS. 

Statutory Authority G. S. 55B-12; 93-12(9). 

.0114 COOPERATION WITH BOARD 
INQUIRY 

A CPA shall fully cooperate with the Board in 
connection with any inquiry it shall make. — FttW 
cooperation includes fully responding in a timely 
manner — te — aH — inquiries — ©f — the — Board — ©r 
representative of the Board. 

Statutory Authority G.S 55B-12; 93-12(9). 

SECTION .0200 - RESPONSIBILITIES TO 
CLIENTS AND COLLEAGUES 

.0201 AUDITING STANDARDS 

(a) A CPA shall not render auditing services for 
a client unles s h e has complied with the applicable 
generally accepted auditing standards. 

(b) The Statements on Auditing Standards issued 
by the AICPA are hereby adopted by reference, as 
provided by G.S. — 150B 1 4 (c), and shall be 
con s idered generally accepted auditing s tandard s 
for the purposes of Ptiragraph (a) of thi s Rule. 

{e) — Departures from s uch s tatements must be 
ju s tified by those who do not follow them. 
(d) Copies — of th e — Statements — ©n — Auditing 



Standards may be inspected in the offices of the 
Board, as described in 21 NCAC 8 A .0102. 
Copies may be obtained from the AICPA, 1211 
Avenue of the Americas, New York, NY — 10036 
as part of the "AICPA Professional Standards." 
They arc available at cost, which is approximately 
twenty eight dollars ($2 8 .00) in paperback form -©f 
twe — hundred — dollars — ($200.00) — va — looseleaf 
subscription form r 

Statutory Authority G.S. 55B-12; 93-12(9). 

.0202 ACCOUNTING PRINCIPLES 

^e) — A CPA shall not express an opinion that 
financial statements are presented in conformity 
with generally accepted accounting principles if 
such statements contain any departure from an 
accounting principle which has a material effect on 
the statements taken as a whole, unless he can 
demonstrate that due to unusual circumstances the 
financial statements would otherwise have been 
misleading. 

{b) — In such cases his report must describe the 
departure, — the — approximate — effects — thereof, — if 
practicable, and the rea s ons why compliance with 
th« — principle — would — result — in — a — mi s leading 
s tatement. 

fe^ The Statements of Financial Accounting 

Standard s , — together — v»4th — those — Accounting 
Research — Bulletins — and — Accounting — Principles 
Board — Opinions — which — are — B©t — superseded — by 
action — of the — FASB, — are — hereby — adopted — by 
reference, as provided by G.S. — 150B 1 4 (c), and 
shall b e considered generally accepted accounting 
principles for the purposes of Paragraph (a) of this 
R»le7 

fd^ Copies — of the — Statements — of Financial 

Accounting Standards may be inspected in the 
offices of the Board, as described in 21 NCAC 8A 
.0102. — Copies may be obtained from the FASB, 
High Ridge Park. Post Office Box 3821, Stamford, 
CT 06905 8 21 as part of the "FASB Accounting 
Standards." — They are available at cost, which i s 
approximately — thirty four — dollars — ($3 4 .00) — m 
paperback — form — and — tw© — hundred — seventy two 
dollars ($272.00) in loo s eleaf subscription form. 

Statutory Authority G.S 55B-12; 93-12(9). 

.0203 FORECASTS 

(a) A CPA shall not permit his name to be used 
tH — conjunction — v»4th — any — forecast — ©f — future 
transactions in a manner which may lead to the 
belief that he vouches for the achicvability of the 
foreca s t. 



1433 



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PROPOSED RULES 



fb) — A CPA s hall not render l acrviocs associatod 
with pro s pective financial statemcnta unless he has 
complied — with — the — standards — fef — accountants' 
services on prospective financial informatioa r 

{e) The — Statcmenta — eH — Standards — fef 

Accountants' Services on Prospective Financial 
Information issued by the AJCPA arc adopted by 
reference, as provided by G.S. — 150B 1 4 (c), and 
shall be considered as the approved standards for 
services on prospective financial information for 
the purposes of Paragraph (b) of this Rule. 

{d) — Departures from such statements must be 
justified by those who do not follow them. 

{e) — Copies of the Statements on Standards for 
Accountants' — Services — en — Prospective — Financial 
Information may be inspected in the offices of the 
Board ao described in 21 NCAC 8A .0102. 
Copies may be obtained from the AICPA. 1211 
Avenue of the Americas, New York, NY 10036 as 
part of the "AICPA Professional Standards." They 
ftfe — available at — eesf; — which — is — approximately 
twenty eight dollars ($28.00) in paperback form or 
twe — hundred — dollars — ($200.00) — ifl — looseleaf 
subscription foni> r 



Statutory Authority G.S. 55B-12; 93-12(9). 



,0204 CONFIDENTIAL CLIENT 
INFORMATION 

(a) — A CPA shall not disclose any confidential 
information — obtained — in — the — course — ef — a 
professional engagement except with the consent of 
the client, 
(b) This Rule shall not be con s trued: 

fi^ to relieve a CPA of his obligation under 

the standards adopted by reference in 
this Section; 



f3)- 



^ 



to aff'ect in any way hi s compliance 
w4th — a — validly — i s sued — s ubpoena — ef 
summons enforceable by — order of a 
court; or 



to prce 
inquiry 



lude him from responding to any 
the AICPA Ethics 



ttfH- 

made by 



Division or Trial — Board, by a duly 
constituted investigative or disciplinary 
body of a state CPA society, or under 
s tate s tatutes. 



fe^ — It is not a violation of this Rule to disclo s e 
confidential client information necessary for the 
SQR process or for any quality review program. 



Statutory Authority 
93-12(9). 



G.S 55B-12; 93-1 2(8c); 



fa) — The ofi'cring or rendering of professional 
services — f&f-, — er — the — receipt — ef; — a — disclosed 
contingent fee by a CPA is not prohibited except 
for engaging to render or rendering by a CPA for 
a contingent fee: 

^ of professional — services — fef; — ef — the 

receipt of such a fee from, any person 
for whom the CPA also performs attest 
se rvices, during the period of the attest 
services — engagement and the period 
covered — ^i" — any — historical — financial 
statements — involved — m — s«eh — attest 
services; and 

f3) fef — the — preparation — ef — original — er 

amended tax returns or claims for tax 

refunds. 

{b) — Fee s are not regarded as being contingent if 

fixed by courts or other public authorities or, in 

tax matters, if determined based on the results of 

judicial proceedings ef the findings ef 

governmental agencies. 



Statutory Authority G.S. 55B-12; 93-12(9). 

.0208 ACCOUNTING AND REVIEW 
SERVICES STANDARDS 

(a) — A CPA shall not render accounting and 
review services for a client unless he has complied 
with standards for accounting and review services. 

(b) The Statements on Standard s for Accounting 
and Review Services issued by the AICPA arc 
hereby adopted by reference, as provided by G.S. 
150B 1 4 (c), — a»d — shall — be — considered — as — the 
approved — s tandard s — for — accounting — and — review 
services for the purpose s of Paragraph (a) of this 
Rttle7 

(e) — Departures from such statements must be 
justified by those who do not follow them. 

{d) — Copies of the Statements on Standards for 
Accounting and Review Services may be inspected 
in the offices of the Board, as described in 21 
NCAC 8 A .0102. — Copies may be obtained from 
the AICPA, 1211 Avenue of the Americas, New 



York, NY — 10036 as 



of the "AICPA 



Professional Standards. " 



.0205 CONTINGENT FEES 



part 

— They are available at 
cost, which is approximately twenty eight dollars 
($28.00) in paperback form or two hundred dollars 
($200.00) in looseleaf sub s cription form. 

Statutory Authority G.S. 558-12; 93-12(9). 

.0209 MANAGEMENT ADVISORY 
SERVICES STANDARDS 

fa) A — GPAt — shaH — net — render — management 

advisory — services — for a client — unless — he — has 



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1434 



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M*™"*™ 



m^mm 



PROPOSED RULES 



complied with standard s for management advisor^' 
services. 

fb^ The — Statemcnta — en — Standards — fef 

Management — Advi s ory — Service s — issued — by — tbe 
AlCPA — ai=e — hereby — adopted — hy — reference, — as 
provided by G.S. — 150B 1 4 (c). and shall be 
con s idered — as — the — approved — standards — fef 
management advisory services for the purposes of 
Paragraph (a) of this Rule. 

fe) — Departures from such statements must be 
justified by those who do not follow them. 

(d) — Copies of the Statements on Standards for 
Management Advisor^' Services may be inspected 
in the office s of the Board, as de s cribed in 21 
NCAC 8 A .0102. — Copies may be obtained from 
the AICPA, 1211 Avenue of the Americas, New 
^Vfefk^ — N¥ — 10036 as part of the — "AICPA 

Professional Standards." They are available at 

co s t, which is approximately ten dollars ($10.00) 
tfl — paperback — form — ©f — two — hundred — dollars 
($200.00) in loo s eleaf subscription form. 

Statutory Authority G.S. 55B-12; 93-12(9). 

.0210 RESPONSIBILITIES IN TAX 
PRACTICE 

{et) — A CPA shall not render services in the area 
of taxation for a client unless he has complied with 
s tandards for tax services. 

(b) — The Statements on Responsibilities in Tax 
Practice issued by the AICPA are hereby adopted 
by reference, as provided by G.S. 150B 1 4 (c), and 
s hall be considered as the approved standards for 
tax services for the purposes of Paragraph (a) of 
this Rule. 

fe) — Departures from such statements must be 
justified by tho s e who do not follow them. 

{4t) — Copie s of the Statements on Re s ponsibilities 
in Tax Practice may be inspected in the offices of 
the Board, as described in 21 NCAC 8 A .0102. 
Copie s may be obtained from the AICPA. — 121 1 
Avenue of the America s . New York. NY 10036 as 
part of the "AICPA Professional Standards." They 
afe — available — at — eest; — which — is — approximately 
twenty eight dollars ($28.00) in paperback form or 
two — hundred — dollars — ($200.00) — m — looseleaf 
subscription form r 



for governmental accounting. 

(b) The Statements on Governmental Accounting 
and Financial Reporting Standards issued by the 
GASB — ftfe — hereby — adopted — by — reference. — as 
provided by G.S. — 150B 1 4 (e). and shall be 
considered — as — the — approved — standards — fer 
governmental — accounting — fef — the — purposes — of 
Paragraph (a) of this Rule. 

fe^ — Departures from such statements must be 
justified by tho s e who do not follow them. 

{d) — Copies of the Statements on Governmental 
Accounting and — Financial — Reporting Standards, 
including technical bulletins and interpretations, 
may be inspected in the office s of the Board, as 
described in 21 NCAC 8 A .0102. Copies may be 
obtained from the GASB, Post Office Box 9125, 

Dept. 285. Stamford, CT 06925. They arc 

available — at — cost, — which — is — approximately 
forty seven dollars and fifty cents ($ 4 7.50). — In 
addition to the basic set. an updating subscription 
s ervice is available for approximately forty four 
dollars ($ 44 .00) annually. 

Statutory Authority G.S 55B-12: 93-12(9). 

.0212 ATTESTATION STANDARDS 

(a) — A CPA shall not render attestation services 
for a client unle ss he has complied with the 
applicable attestation s tandards. 

(b) — The Statements on Standards for Attestation 
Engagements issued by the AICPA are hereby 
adopted — hy — ref e r e nce, — as — provided — by — G^ 
150B 1 4 (e). and shall be considered attestation 
standards for the purposes of Paragraph (a) of this 

(e^ — Departures from such s tatements must be 
justified by those who do not follow them. 

fd) — Copies of the Statements on Standards for 
Attestation Engagements may be inspected in the 
offices of the Board, as described in 21 NCAC 8A 
.0102. — Copies may be obtained from the AICPA, 
1211 Avenue of th e America s , Ncsv York, NY 
10036. as part of the "AICPA Profe ss ional 
Standards." — They are available at cost, which i s 
approximately thirty dollars ($30.00) in paperback 
form or two hundred dollar s ($200.00) in looseleaf 
subscription form. 



Statutory Authority G.S. 55B-12; 93-12(9). 



Statutory Authority G.S 55B-12; 93-12(9). 



.0211 GOVERNMENTAL ACCOUNTING 
STANDARDS 

(a) — A CPA shall not permit his name to be 
associated with governmental financial s tatements 
for a client unle ss he ha s complied with standard s 



.0213 RETEIVTION OF CLIENT RECORDS 

fa) — A CPA must return client records in his 
possession to the client after a demand is made for 

their — return. The — r e cord s — must — be — returned 

imm e diately upon demand unless circumstances 



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PROPOSED RULES 



make aomc delay rcoBonablc in order to retrieve a 
closed file or to extract the CPA's work papora 
described in Paragraph (e) of this Rule — If the 
rooordg — cannot — be returned — immediately upon 
demand, the CPA will immediately notify the 
client of the date the records will be returned. 
Nothing in this Rule shall be interpreted to require 
a CPA to pay delivery costs when the records are 
returned to the client. 

(b) If a CPA is engaged to perform certain work 
for a client, the CPA is only required to return or 
furnish copies of those records originally given to 
the CPA by the client if one of the following 
occurs: 

i^ the engagement is terminated prior to 

the completion of such work, or 

^3) the CPA's work product ha s neither 

been — received — nor paid — for by — the 
client. 
ip) — A CPA shall not retain a client's records in 
order to force payment of any kind. 

(d) — Work papers are u s ually the CPA's property 
aed — seed — net — be — s urrendered — te — the — client. 
However, — in some instances — work paper s will 
contain data which should properly be reflected in 
the client's books and records but for convenience 
have not been duplicated therein with the result 
that the client's records are incomplete. — In such 
instances, — the — portion — ef — tfee — work — papers 
containing such data constitutes part of the client's 
record s , and copies should be given to the client 
along with the rest of the client's records. — Work 
papers considered part — of the client's — records 
include but arc not limited to: 

{i-) Worksheets — in — lieu of original entry 

(e.g., listings and distributions of cash 
receipts — of — eash — disbursements — en 
columnar work paper); 

fS) Worksheets in lieu of general ledger or 

s ubsidiary ledgers. — s uch as accounts 
receivable. — job — east — aed — equipment 
ledgers, or similar types of depreciation 
records; 

(3) All adjusting and clo s ing journal entries 

and supporting details not fully set forth 
in the journal entry; and 

(4) Consolidating — ©f — combining — journal 

entries and worksheets and s upporting 

detail used in arriving at final figures 

incorporated in an end product such as 

financial statements or tax returns. 

fe) — Work papers developed by the CPA incident 

to the performance of an engagement which do not 

re s ult in changes to the client' s records, or are not 

tfl — them s elve s — part — of the — records — ordinarily 



maintained by such clients, arc considered to be 
s olely the CPA's work papers and are not the 
property of the client. — For example, the CPA may 
make extensive analyses of inventory or other 
accounts as part of his selective audit procedures. 
These analyses are considered to be a part of the 
CPA's work papers, even if the analyses have been 
prepared by client personnel at the request of the 
CPA. — Only to the extent these analyses result in 
changes to the client's records would the CPA be 
required to furni s h the detail s — from his work 
papers in support of the journal entries recording 
the changes, unless the journal entries themselves 
contain all necessary details. 

ff) — Nothing in this Rule shall be construed to 
require the CPA to furni s h a client with copie s of 
the — client' s — records — already — m — the — client's 
possession. — However, if the client assorts that 
s uch records have been lost, or are otherwise not 
in the client's posses s ion, the CPA shall furnish 
copies of the records within a reasonable time for 
a fee. 



Statutory Authority G.S. 55B-12; 93-12(9). 

SECTION .0300 - OTHER 
RESPONSIBILITIES 



.0301 ADVERTISING OR OTHER FORMS 
OF SOLICITATION 

{a^ — A CPA shall not seek to obtain clients by 
advertising or using other forms of s olicitation in 
a manner that is false, misleading or deceptive. 

(b) CPAs — residing — m — North — Carolina may 

adverti s e the nature of services provided to clients. 
However, the CPA may not advertise or indicate 
a specialty designation or other title unle s s the 
CPA has met the requirements of the granting 
organization for the separate title or specialty 
designation and the title or specialty has been 
recognized by the Board. — A list of specialties and 
titles and recognized sponsoring organizations shall 
be regularly published in the Board's newsletter. 

Statutory Authority G.S 55B-12; 93-12(9). 

.0302 COMMISSIONS 

A CPA shall not pay a commission to obtain a 
client, nor shall he accept a commission for a 
referral to a client, of products or services of 
others. — This Rule s hall not prohibit paym e nts for 
the — purchase — ef — an — accounting — practice — er 
retirement — payments — t© — individuals — formerly 
engaged in the practice of public accounting or 
payments to their heirs or estates. 



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1436 



PROPOSED RULES 



Statutory Authority G.S. 55B-12; 93-12(9). 

.0303 INCOMPATIBLE OCCUPATIONS 

A CPA shall not concurrently engage in any 
business — ef — occupation — which — would — create — a 
conflict — ef — interest — m — rendering — professional 
services. 

Statutory Authority G.S. 55B-12; 93-12(9). 

.0304 QUALIFICATION OF PARTNERS 

A CPA shall not engage in the public practice of 
accountancy with a partner who is anyone other 
than the holder of an unrevoked and currently 
valid CPA certificate. 

Statutory Authority G.S 55B-12; 93-12(9). 

.0305 NAME OR STYLE OF A PRACTICE 

(a) — A firm engaged in the public practice of 
accounting may not use any false or misleading 
name, title, or reference in its name or associated 
with its name. 

(b) It is eonaidcrcd misleading if a firm practices 
under a name or style which would tend to imply 
the existence of a partnership or a professional 
eorpromtion of more than one shareholder or an 
association when in fact there is no partnership nor 
is there more than one shareholder in the firm. 
For example, no firm having just one owner may 
have as a part of its name the words "as s ociates" 
or "company" or their abbreviations. 

Statutory Authority G.S 55B-5: 93-12(9). 

.0306 FIRM NAME OR STYLE OF A 
PRACTICE 

Use by a CPA practicing public accountancy by 
himself of any name other than his own name, or 
u s e by a partnership, a professional corporation or 
a professional association engaged in the practice 
of public accountancy of any name other than the 
name s of on e or more of its current or former 
partners or shareholders, — must be approved in 
advance by the Board. 

Statutory Authority G.S 55B-5; 93-12(9). 

.0310 PRACTICE THROUGH A 
NON-COMPLVTNG FIRM 
PROHIBITED 

(e) A CPA shall not engage in the public 

practice of accountancy through a firm which is in 
violation of the regi s tration r e quirementa of 21 
NCAC — 8J — .000 8 , — 8J — .0010 or the — SQR 



requirements of 21 NCAC 8 M .0102. 

(b) If a firm fails to comply with any part of 21 
NCAC 8J .0008, 8 J .0010 or 8 M .0102, the Board 
may take disciplinary action against the firm's 
members. — Such discipline may include: 

fH a — conditional — license — upon — s uch 

conditions — as — the — Board — m^i" — deem 
appropriate for non compliance of less 
than 60 days; 

^33 a conditional license and one hundred 

dollars ($100.00) civil penalty for 
non compliance in excess of 60 days 
but not more than 120 day s ; 

^ a suspension of each member's CPA 

certificate for a pKsriod of not less than 
30 days for non compliance in excess of 
120 day s . 

Statutory Authority G.S. 55B-12; 93-1 2(8c); 
93-12(9). 

.03 11 FALSIFICATION IN CONNECTION 
WITH QUALITY REVIEW 
PROGRAMS 

A CPA shall not falsify a review, report, or any 
required — program — or checklist — of any — quality 
review program. 

Statutory Authority G.S 93-12(9). 

.0312 QUALITY REVIEW STANDARDS 

A CPA who is engaged to perform a quality 
review shall not violate the rules or standards of 
the quality review program under which the review 
is made or the engagement contract connected with 
that quality review. 

Statutory Authority G.S 93-1 2(8c); 93-12(9). 

SECTION .0400 - CPE REQUIREMENTS 

.0401 CPE REQUIREMENTS FOR CPAS 

(a) In order for a CPA to receive CPE credit for 
a course: 

(1) the CPA must attend or complete the 
course; 

(2) the course must meet the requirements 
set out in 21 NCAC 8G .0404(a) or (d); 
and 

(3) the course must increase the 
professional competency of the CPA. 

(b) The Board approves sponsors of CPE 
courses and not particular courses. A CPE course 
provided by an approved sponsor is presumed to 
meet the CPE requirements set forth in 21 NCAC 



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PROPOSED RULES 



8G .0404(a) if the sponsor has indicated that the 
course meets those requirements. However, it is 
up to the CPA attending the course and desiring to 
claim CPE credit for it to assess whether it 
increases bis their professional competency. 

(c) A course that increases the professional 
competency of a CPA is a course in an area of 
accounting in which the CPA practices or is 
planning to practice in the near future, or in the 
area of professional ethics or an area related to the 
profession, and is taught at a level which 
challenges the CPA. 

(d) Because of differences in the education and 
experience of CPAs, a course may contribute to 
the professional competence of one CPA but not 
another. Each CPA must therefore exercise 
judgment in selecting courses for which CPE 
credit is claimed and choose only those that 
contribute to that CPAs professional competence. 

(e) Active CPAs must complete 40 CPE hours, 
computed in accordance with 21 NCAC 8G .0409 
by December 31 of each year, except as follows: 

(1) CPAs having certificate applications 
approved by the Board in April-June 
must complete 30 CPE hours during the 
same calendar year. 

(2) CPAs having certificate applications 
approved by the Board in 
July-September must complete 20 CPE 
hours during the same calendar year. 

(3) CPAs having certificate applications 
approved by the Board in 
October-December must complete 10 
CPE hours during the same calendar 
year. 

(f) There are no CPE requirements for retired or 
inactive CPAs. 

(g) Any CPE hours completed during the 
calendar year in which the certificate is approved 
may be used for that year's requirement even if the 
hours were completed before the certificate was 
granted. When a CPA has completed more than 
the required number of hours of CPE in any one 
calendar year, the extra hours, not in excess of 20 
hours, may be carried forward and treated as hours 
earned in the following year. 

(h) Any CPE hours used to satisfy the 
requirements for change of status as set forth in 2 1 
NCAC 8J .0005(b) or (c), for reinstatement as set 
forth in 21 NCAC 8J .0006, or for application for 
a new certificate as set forth in 21 NCAC 81 .0004 
may also be used to satisfy the annual CPE 
requirement set forth in Paragraph (e) of this Rule. 

(i) It is the CPA's responsibility to maintain 
records substantiating the CPE credits claimed for 



the current year and for each of the four calendar 
years prior to the current year. 

Statutory Authority G.S. 93-1 2(8b). 

.0406 COMPLIANCE WITH CPE 
REQUIREMENTS 

(a) All active CPAs must file with the Board a 
completed CPE reporting form by the July 1 
renewal date of each year. Inactive CPAs must 
file with the Board an affidavit of exemption from 
the CPE requirement by the July 1 renewal date. 

(b) If a CPA fails to complete the CPE 
requirements prior to the end of the previous 
calendar year but the CPA has completed them by 
the July 1 renewal date, the Board may, in its 
discretion; 

(1) change the CPA's status from active to 
conditional, and may impose any 
conditions that the Board considers 
appropriate in the circumstances, as a 
penalty for the first such failure within 
a five calendar year period; 

(2) place the CPA on conditional status 
again and require the payment of a civil 
penalty of one hundred dollars 
($100.00) for the second such failure 
within a five calendar year period; and 

(3) deny the renewal of the CPA's 
certificate for a period of not less than 
30 days and until the CPA meets the 
reinstatement requirements set forth in 
21 NCAC 8J .0006 for the third such 
failure within a five calendar year 
period. 

Statutory Authority G.S 93-1 2(8b); 93-1 2(9e). 

.0409 COMPUTATION OF CPE CREDITS 

(a) Group Courses: Non-College. CPE credit 
for a group course that is not part of a college 
curriculum is given based on contact hours. A 
contact hour is 50 minutes of instruction. Credit 
is granted only for full contact hours. For 
example, a group course lasting 100 minutes is 
two contact hours and thus two CPE credits, and 
a group course lasting between 50 and 100 minutes 
is only one contact hour and thus only one CPE 
credit. When individual segments of a group 
course are less than 50 minutes, the sum of the 
individual segments is added to determine the 
number of contact hours. For example, five 
30-minute presentations are 150 minutes, which is 
three contact hours and three CPE credits. No 
credit shall be allowed for a segment unless the 



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1438 



r..,..— — ^„.. ...u-i»,»..»> «„..«.,»,.,..^ 



PROPOSED RULES 



participant completes the entire segment. 

(b) Completing a College Course. CPE credit 
for completing a college course in the college 
curriculum will be granted based on the number of 
credit hours the college gives the CPA for 
completing the course. One semester hour of 
college credit is 15 CPE credits; one quarter hour 
of college credit is ten CPE credits; and one 
continuing education unit (CELT) is ten CPE 
credits. If a college course does not carry credit, 
CPE credit for the course will be based on the 
number of contact hours of the course using the 
formula set out in Paragraph (a) of this Rule. 
However, under no circumstances will CPE credit 
be given to a CPA who audits a college course. 

(c) Self Study. CPE credit for a self-study 
course is given based on the average number of 
contact hours needed to complete the course. 
One-half of the average completion time is allowed 
for CPE credit. A sponsor must determine, on the 
basis of pre-tests, the average number of contact 
hours it takes to complete a course. 

(d) Instructing a CPE Course. CPE credit for 
teaching or presenting a CPE course is given based 
on the number of contact hours spent in preparing 
and presenting the course. No more than 50 
percent of the CPE credits required for a year may 
be credits for preparing for and presenting a 
course. CPE credit for preparing for and 
presenting a course is allowed only once a year for 
a course presented more than once in the same 
year by the same CPA. 

(e) Authoring a Publication. CPE credit for 
published articles and books is given based on the 
number of contact hours the CPA spent writing the 
article or book. Generally, no more than 25 
percent of a CPA's required CPE credits for a 
year may be credits for published articles or 
books. However, upon written request by the 
CPA, the Board may award more CPE credits for 
the article or book. 

(f) Instructing a College Course. CPE credit for 
instructing a graduate level college course is given 
based on the number of credit hours the college 
gives a student for successfully completing the 
course, using the calculation set forth in Paragraph 
(b) of this Rule. Credit will not be given for 
instructing an undergraduate level course. In 
addition, no more than 50 percent of the CPE 
credits required for a year may be credits for 
instructing a college course and, if CPE credit is 
also claimed under Paragraph (d) of this Rule, no 
more than 50 percent of the CPE credits required 
for a year may be credits claimed under Paragraph 
(d) and this Paragraph. CPE credit for instructing 



a college course is allowed only once for a course 
presented more than once in the same year by the 
same CPA. 

(g) Interactive Self-Study. CPE credit for 
interactive self-study is based on a program 
designed to use interactive learning methodologies 
that simulate a classroom learning process by 
employing computer software, other course 
material, or administrative systems that provide 
significant ongoing, interactive feedback to the 
learner regarding their learning progress. The 
sponsor must determine the CPE credit to be 
allowed based on the average number of contact 
hours needed to complete the course. 

Statutory Authority G.S. 93-1 2(8b). 

SUBCHAPTER 8H - RECIPROCITY 

.0002 TEMPORARY PERMIT 

(a) The Board may grant temporary permits only 
to applicants for reciprocal certificates pending 
their qualification under 21 NCAC 8H .0001. 

(b) This temporary permit will designate the 
holder as a CPA in good standing in the state 
issuing the CPA's certificate. An out-of-state CPA 
who does not have a certificate from this Board 
but desires to use the CPA title within this state 
must first: 

apply to the Board for a temporary 
permit and reciprocal certificate on 
forms provided by the Board; 
furnish the Board with an affidavit 



m 



121 



O) 



signed by an official of the CPA 
licensing board of a state in which the 
CPA is currently licensed to practice 
public accounting, showing both the 
certificate number and that the applicant 
is in good standing; and 
furnish the Board with evidence of the 



applicant's CPA examination grades 

through an affidavit signed by an 

official of a CPA licensing board which 

can verify the grades; 

(c) An applicant for a temporary' permit must 

pay a nonrefundable fee of twenty five dollars 

($25.00). — which — is — applied — to th e — fee — for a 

reciprocal — certificate. Upon approval of a 

temporary permit, the Board will issue the 

applicant a statement confirming that the CPA is in 

good standing in the state issuing the CPA's 

certificate and is entitled temporarily to use the 

CPA title and engage in the public practice of 

accountancy in North Carolina for a stated period. 

The stated period shall expire 120 days after issue 



1439 



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PROPOSED RULES 



or upon issuance of the individual's reciprocal 
certificate, whichever comes first. 

Statutory Authority G.S. 93-12(6); 93-12(7a). 

.0003 APPLICATION FOR TEMPORARY 
PERMIT 

fa) — An out of state CPA who docs not have a 
certificate from this Board but desires to use the 
CPA title within this state must first: 

^4^ apply to the Board for a temporary 

permit — efi — a — form — provided — by — the 
Board; 

{3) furnish — the — Board — with — an affidavit 

signed — by — an — official — ef — the — GR\ 
licensing board of a state in which the 
GPA — is — currently — licensed, — showing 
both the certificate number and that the 
applicant is in good standing; 

^ furnish the Board with evidence of hi s 

CPA examination grades through an 
affidavit signed by an official of a CPA 
licen s ing board which can verify the 
grades ; 

^4) furnish the Board with a statement that 

all work on the engagements will be 
done by or under the direct sujxirvision 
of a CPA certified by this Board or 
holding a temporary permit from this 
Board; and 

f§) pay an initial application fee for the 

first temporary permit or a renewal fee 

for each subsequent application for a 

temporary permit. 

(b) — The initial application fee and the renewal 

fee for temporary permits shall be the maximum 

amount allowed by statute for each license year or 

fraction thereof. 

fe) — Upon approval of a temporary permit, th e 
Board — w4H — issue — the — applicant — a — statement 
confirming that the CPA is entitled temporarily to 
u s e the CPA title and engage in the public practice 
of accountancy in North Carolina for a stated 
license year or fraction thereof. 



Statutory Authority G.S. 93-12(3). 

SUBCHAPTER 81 - REVOCATION OF 

CERTIFICATES AND OTHER 

DISCIPLINARY ACTION 

.0001 DISCIPLINARY ACTION 

(a) Any person may petition the Board for 
appropriate disciplinary action against a CPA. 

(b) The petition shall set forth in simple 
language the facts upon which the petition is 
based. It shall bear an affidavit of the petitioner 
stating that he believes they believe the facts stated 
in the petition are true and that he is they are 
prepared to prove them at a hearing. 

(c) The petition shall be filed in the office of the 
Board and thereupon it shall be the duty of the 
Executive — Director — te — notify — the — enforcement 



committee — about — its- 



The Board's 



filing . 
standards staff shall conduct 
investigation. Based upon 



any 
its 



professional 
appropriate 

investigation, the professional standards staff may 
prepare a proposed Hearing Notice. A 

Professional Standards Committee, appointed by 
the President of the Board, shall determine 
whether the allegations in the proposed Hearing 
Notice, if proven, would warrant a contested case 
proceeding pursuant to G.S. 150B-38 - 150B-42. 
This determination will be made without any 
Board member becoming biased or otherwise 
prejudiced as to the ultimate determination of the 
alleged violation. 

(d) After receiving notice of the petition, the 
e nforcement committee shall authorize or conduct 
any necessary investigation. — If a majority of the 
committee concludes that there i s sufficient cause 



fe 



shall 



f — disciphnary — action, — the — committee 
recommend that the Board set the matter for a 
hearing conducted pursuant to G.S. — 150B 38 — 
150B 4 2. The Board may publish or announce the 
disciplinary action against a CPA in such manner 
and for such period as it deems appropriate. 

Statutory Authority G.S. 55B-12; 93-12(9). 



Statutory Authority G.S. 93-10; 93-12(6); 
93-12(7a); 93-12(8). 

.0004 NOTICE TO BOARD OF DISCIPLINE 
BY OTHER AGENCY 

Any applicant for or holder of a temporary 
permit or reciprocal certificate issued by this 
Board shall also comply with the reporting 
requirements listed in 21 NCAC 8G .0113 8N 
.0208. 



.0004 MODIFICATION OF DISCIPLINE 
AND NEW CERTIFICATE 

(a) A person or firm ; — partnership. — ef 
professional corporation, that has been disciplined 
by the Board may apply to the Board for 
modification of the discipline at any time after the 
effective date of the Board's decision imposing it; 
however, if any previous application has been 
made with respect to the same discipline, no 
additional application will be considered before the 



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1440 



m^ss^gmiMmmm 



PROPOSED RULES 



lapse of a calendar year following the Board's 
decision on that previous application. Provided, 
however, that an application to modify permanent 
revocation will not be considered until after five 
years from the date of the original discipline, nor 
more often than three years after the Board's last 
decision on any prior application for modification. 

(b) The application for modification of discipline 
or for a new certificate shall be in writing, shall 
set out and. as appropriate, shall demonstrate good 
cause for the relief sought. The application for an 
individual shall be accompanied by at least tv.^ 
three supporting recommendations, made under 
oath, from CPAs who have personal knowledge of 
the activities of the applicant since the discipline 
was imposed. TTie application for a firm 
partnership, or professional corporation, shall be 
accompanied by at least fwe three supporting 
recommendations, made under oath, for each 
partner, member, or shareholder, from CPAs who 
have personal knowledge of the activities of the 
partner, member, or shareholder, since the 
discipline was imposed. 

(c) "Good cause" as used in Paragraph (b) of 
this Rule means that the applicant is completely 
rehabilitated with respect to the conduct which was 
the basis of the discipline. Evidence 
demonstrating such rehabilitation shall include 
evidence: 

( 1 ) that such person has not engaged in any 
conduct during the discipline period 
which, if that person had been licensed 
or registered during such period, would 
have constituted the basis for discipline 
pursuant to G.S. 93-12(9); 

(2) that, with respect to any criminal 
conviction which constituted any part of 
the previous discipline, the person has 
completed the sentence imposed; and 

(3) that, with respect to a court order, 
restitution has been made to any 
aggrieved party. 

(d) In determining good cause, the Board may 
consider all the a pplicant's activities since the 
disciplinary penalty was imposed, the ofFense for 
which the applicant was disciplined, the applicant's 
activities during the time the applicant was in good 
standing with the Board, the applicant's 
rehabilitative eff^orts, restitution to damaged parties 
in the matter for which the penalty was imposed, 
and the a pplicant's general reputation for truth and 
professional probity. For the purpose of this 
Paragraph, "applicant" shall, in the case of a firm, 
include partners, members, or shareholders. 

(e) (d) Any person who applies for a 



modification of discipline and for a new certificate 
after revocation or forfeiture shall, in addition to 
the other requirements of this Section, comply with 
all qualifications and requirements for initial 
certification which exist at the time of the 
application. 

{f} ^ No application for a new certificate or for 
modification of discipline will be considered while 
the applicant is serving a sentence for any criminal 
offense. Serving a sentence includes incarceration, 
probation (supervised or unsupervised), parole, or 
suspended sentence, any of which are imposed as 
a result of having been convicted or plead to a 
criminal charge. 

(g) ^ An application will ordinarily be ruled 
upon by the Board on the basis of the 
recommendations and evidence submitted in 
support thereof. However, the Board may make 
additional inquiries of any person or persons, or 
request additional evidence it deems appropriate. 

(h) fg) As a condition for a new certificate or 
modification of discipline, the Board may impose 
terms and conditions it considers suitable. 

(h) In considering an application, the Board may 
consider all the applicant's activities s ince the 
disciplinary penalty was imposed, the offense for 
which the applicant was disciplined, the applicant's 
activities during the time the applicant was in good 

s tanding — Vt4tl5 the — Board, the — applicant's 

rehabilitative cfForts. restitution to damaged parties 
in the matter for which the penalty was imposed, 
and the applicant's general reputation for truth and 

professional — probity. For the purpose of this 

Paragraph. — "applicant" — shall, — in the case of a 
partnership or profe ss ional corporation, — include 
partners or shareholders. 

Statutory Authority G.S. 55B-12; 93-2; 93-1 2(7a); 
93-12(7b): 93-12(9). 

SUBCHAPTER 8J - RENEWALS AND 
REGISTRATIONS 

.0001 ANNUAL RENEWAL OF 

CERTIFICATE, FORFEITURE, AND 
RE APPLICATION 

(a) All active and inactive CPAs must renew 
their certificates annually by the first day of July. 
The fee for such renewal is the maximum amount 
allowed by statute. 

(b) To renew a certificate a CPA must submit to 
the Board: 

(1) a properly completed certificate renewal 
application form; 

(2) a properly completed CPE report, as 



1441 



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PROPOSED RULES 



required by 21 NCAC 8G .0406(a); and 
(3) the annual renewal fee. 

(c) Upon feilure of a CPA to comply with any 
applicable part of Paragraph (b) of this Rule by 
July 1 , the Board will send notice of such feilure 
to the CPA at the most recent mailing address the 
Board has on file. Subsequent feilure of the CPA 
to comply with any applicable part of Paragraph 
(b) of this Rule within 30 days after such notice is 
mailed automatically results in forfeiture of the 
CPA's certificate, as required by G.S. 93-12(15). 

(d) Upon forfeiture of a certificate, the 
certificate holder is no longer a CPA and the 
Board will send notice of such forfeiture to the 
certificate holder by certified mail to the most 
recent mailing address the Board has on file. The 
certificate holder shall return the certificate to the 
Board office within five days after receipt of notice 
of forfeiture or, if the certificate has been 
destroyed or lost, shall submit an affidavit, on a 
form supplied by the Board, within ten days of 
receipt of such notice that the certificate has been 
destroyed or has been lost and will be returned to 
the Board if found. 

(e) A person who has forfeited a certificate 
pursuant to G.S. 93-12(15) for feilure to renew bis 
their certificate may apply for a new certificate 
under 21 NCAC 81 .0004. 

Statutory Authority G.S. 93-12(7a); 93-12(8); 
93-12(8a); 93-12(8b); 93-12(15). 

.0002 SUPERVISION OF CPA OFFICES 

Every CPA office or firm which uses any words, 
letters, abbreviations, symbols or other means of 
identification to indicate that the office is engaged 
in the practice of public accountancy shall be 
actively and locally supervised by a CPA whose 
primary responsibility and a corresponding amount 
of time shall be work performed in that office. No 
person shall be designated as the supervisor or 
manager of any such office unless he is they are 
the holder of a North Carolina CPA certificate in 
good standing. 

Statutory Authority G.S 93-1 2(8a): 93-12(9). 

.0005 RETIRED AND EVACTIVE STATUS: 
CHANGE OF STATUS 

(a) A CPA may apply to the Board for change 
of status to retired status or inactive status 
provided the CPA meets the description of the 
appropriate status as defined in 21 NCAC 8 A 
.0301. Application for any status change may be 
made on the annual certificate renewal form or 



another form provided by the Board. 

(b) A CPA who meets the description of retired 
s tatu s 08 defined in 21 NCAC 8 A .0301 i s not 
required to change his status from inactive or 
active. — However, a A CPA who does not meet the 
description of inactive or retired as defined in 21 
NCAC 8A .0301 may not be or remain on inactive 
or retired sfetus. Further, a CPA who is or begins 
working in the field of accounting within this state 
may not be or remain on inactive status. 

(c) A CPA on retired status may change his 
status to active status by: 

(1) paying the certificate renewal fee for 
the license year in which the application 
for change of sfetus is received; and 

(2) furnishing the Board with evidence of 
satisfactory completion of 40 hours of 
acceptable CPE courses during the 12 
month period immediately preceding the 
CPA' s application for change of status. 
Eight of the required hours must be 
credits derived from a course or 
examination in North Carolina 
accountancy statutes and rules 
(including the Code of Professional 
Ethics and Conduct contained therein) 
as set forth in 21 NCAC 8G .0401(a). 

(d) A CPA on retired status may change his 
status to inactive status by paying the certificate 
renewal foe for the license year in which the 
application — fef — change — ef — status — ts — received 
surrendering their certificate . 

(e) A CPA Any individual on inactive status 
may change his — status to active status by 
complying with the requirement — m — Paragraph 
(c)(2) of this Rule requirements of 21 NCAC 8J 
.00Q6(c) . 

Statutory Authority G.S 93-12(8): 93-1 2(8b). 

.0006 SURRENDER OF CERTIFICATE AND 
REINSTATEMENT 

(a) A certificate holder who determines that the 
certificate of qualification issued by the Board is 
no longer needed or desired may voluntarily 
surrender the certificate and shall be considered 
inactive. 

(b) A person who has surrendered hi* a 
certificate is no longer a CPA and thus is not 
subject to the renewal fee or CPE requirements 
contained in these Rules. 

(c) A person who desires to reinstate his a 
surrendered certificate shall make application and 
provide the following to the Board: 

(1) payment of the current certificate 



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1^ 



PROPOSED RULES 



application fee; 

(2) three certificates of moral character and 
endorsements as to eligibility signed by 
CPAs holding valid certificates granted 
by any state or territory of the United 
States or the District of Columbia; and 

(3) evidence of satisfactory completion of 
the CPE requirement described in 21 
NCAC 8J .0005(c)(2). 

(d) The certificate may be reinstated in the 
discretion of the Board. 

Statutory Authority G.S. 93-12(5); 93-1 2(8a); 
93-12(8b). 

.0008 FIRM REGISTRATION 

(a) All CPA firms must register with the Board 
within 30 days after opening a North Carolina 
office or beginning a new firm unless they are t© 
fee — incorporated a professional corporation, 
professional limited liability company. or 
registered limited liability partnership , in which 
case they must register prior to incorporation 
formation pursuant to 21 NCAC 8K .0104. 

(b) In addition to the initial registration required 
by Paragraph (a) of this Rule, all CPA firms must 
register annually by January 31 with the Board 
upon forms provided by the Board. 

(c) TTie information provided by the registration 
shall include: 

(1) Either an application for exemption 
from SQR. a request to be deemed in 
compliance with SQR or registration for 
SQR. pursuant to 21 NCAC 8M .0102 
and .0104; 

(2) For all firms not exempt from the SQR 
program. with the registration 
immediately following its review, the 
affidavit required by 21 NCAC 8M 
.0102(d); 

(3) For all North Carolina offices, an office 
registration form indicating the name of 
the office supervisor, the location of the 
office and its telephone number; 

(4) For all partnerships or registered 
limited liability partnerships , a list of 
all resident and nonresident partners of 
the partnership; 

(5) For all professional limited liability 
companies, the information set forth in 
21 NCAC 8K .0104(d); 

(6) {&) For all incorporated firms, the 
information set forth in 21 NCAC 8K 
.0104(d); 

(7) f6) For all firms, the appropriate 



registration fees as set forth in 21 
NCAC 8J .0010; and 
(8) f?) For all new firms, the percentage of 
ownership held individually by each 
partner^ ©f shareholder^ or member : 

(A) in the new firm; and 

(B) at the year-end in each firm in which 
that partner^ member, or shareholder 
was a partner^ member, or sharehold- 
er during the preceding two years. 

(d) All information provided for registration 
with the Board shall pertain to events of and action 
taken during the year preceding the year of regis- 
tration. The last day of the preceding calendar 
year is the "year-end". 

(e) With regard to Paragraph (c)(3) of this Rule, 
one representative of a firm may file all documents 
with the Board on behalf of the firm's offices in 
North Carolina. However, responsibility for 
compliance with this Rule will remain with each 
office supervisor. 

(f) With regard to Paragraph (c)(4) or (c)(5) of 
this Rule, one annual listing by a representative of 
the partnership, registered limited liability partner- 
ship, or professional limited liability company shall 
satisfy the requirement for all partners or members 
of the firm. However, each partner or member 
shall remain responsible for compliance with this 
Rule. The absence of a filing under Paragraph 
(c)(4) or (c)(5) of this Rule shall be construed to 
mean that no partnership^ registered limited liabili- 
ty partnership, or professional limited liabilits' 
company exists. 

(g) Notice that a firm has dissolved or any 
change in the information required by Paragraph 
(c)(3) of this Rule must be delivered to the Board's 
office within 30 days after the change or dissolu- 
tion occurs. 

(h) Upon written petition by a firm, the Board 
may, in its discretion, grant the firm a conditional 
registration for a period of 60 days or less, if the 
firm shows that circumstances beyond its control 
prohibited it from registering with the Board, 
completing a quality review or notifying the Board 
of change or dissolution pursuant to Paragraphs 
(a), (b). (c). and (g) of this Rule. The Board may 
grant a second further extension under extenuating 
circumstances. 

Statutory Authority G.S 55B-10; 55B-12: 57C-1: 
57C-2: 59-84.2; 93-12(8a); 93-1 2(8c). 

.0010 REGISTRATION AND SQR FEES 

The annual registration fees shall be as follov.s: 
(1) For exemption from SQR. ten dollars 



1443 



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PROPOSED RULES 



($10.00); 

(2) For participation within SQR or for a 
request to be deemed in compliance with 
SQR, seventy-five dollars ($75.00) plus 
five dollars ($5.00) for each additional 
North Carolina office of the firm not 
excused from SQR by 21 NCAC 8M 
.0204; 

(3) For all incorporated firm s professional 
corporations or professional limited 
liability companies , twenty-five dollars 
($25.00); and 

(4) For all non-incorporated firms which 
have offices both within and outside the 
state of North Carolina, whether sole 
proprietorships, ef partnerships, or regis- 
tered limited liability partnerships, an 
amount equal to two thousand five hun- 
dred dollars ($2,500.00) or the number 
of owners of the firm multiplied by ten 
dollars ($10. (X)). whichever is less. 

Statutory Authority G.S. 55B-11; 55B-12; 57C-1; 
57C-2; 59-84.2; 93-1 2(7b); 93-1 2(8a); 93-1 2(8c). 

.0011 COMPLIANCE WITH FIRM AND 
SQR REGISTRATION 

If a firm fails to comply with any part of 21 
NCAC 8J .0008, 8J .0010 or 8M .0102. the Board 
may take disciplinary action against the firm's 
members. Such discipline may include: 
(1) a conditional license upon such condi- 
tions as the Board may deem appropriate 
for non-compliance of less than 60 days; 
a conditional license and one hundred 



ill 



01 



dollar ($100.00) civil penalty for 

non-compliance in excess of 60 days but 

not more than 120 days; 

a suspension of each member's CPA 

certificate for a period of not less than 30 

days for non-compliance in excess of 120 

days. 



Statutory Authority G.S. 55B-12; 57C-1; 57C-2; 
59-84.2; 93-1 2(8c); 93-12(9). 

SUBCHAPTER 8K - PROFESSIONAL 

CORPORATIONS AND PROFESSIONAL 

LIMITED LIABILITY COMPANIES 

SECTION .1000 - GENERAL PROVISIONS 

.0104 REGISTRATION AND RENEWAL 

(a) Domestic CPA professional corporations or 
professional limited liability companies must be 



formed and all CPA professional corporations or 
professional limited liability companies must be 
operated in accordance with the requirements set 
out in G.S. 55B and 57C. Before any CPA 
professional corporation or professional limited 
liability company can off'er to perform or perform 
any professional services in this state, it must 
register with the Board. 

(b) Initial registration. 

(1) Domestic CPA Corporation or Profes- 
sional Limited Liability Company . In 
order to register initially with this 
Board, the incorporators of a domestic 
CPA corporation or professional limited 
liability company , prior to incorpora- 
tion of the firm, must: 

(A) prepare and file with the Board the 
articles of incorporation along with 
any supporting documents and appro- 
priate checks for fees payable to the 
Secretary of State; 

(B) complete and file with the Board the 
application for professional corpora- 
tion or professional limited liability 
company registration form along with 
any supporting documents; and 

(C) pay to the Board an initial registration 
fee of fifty dollars ($50.00). 

(2) Foreign CPA Corporation or Foreign 
Limited Liability Company . To regis- 
ter initially with the Board, the officers 
of a foreign corporation or foreign 
limited liability company , prior to 
performing services or offering to 
perform services in North Carolina, 
must submit to the Board: 

(A) on an application for registration form 
provided by the Board, a list of its 
present shareholders or members and 
the state or territory issuing the CPA 
certificate, or the equivalent, of each 
shareholder or member and the num- 
ber of each certificate or equivalent; 
and 

(B) the documents required by G.S. 
55A-61, aftd 55A-62, and 57C-7 . 

(c) In addition to its initial registration, every 
CPA corporation or professional limited liability 
company , whether domestic or foreign, must 
register annually pursuant to 21 NCAC 8J .0008. 

(d) The application for registration by a CPA 
corporation or professional limited liability compa- 
ny shall provide the following information: 

(1) the name and address of the profession- 
al corporation or professional limited 



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November I, 1993 



1444 



PROPOSED RULES 



liability company ; 

(2) the address of each office operated or 
maintained by the corporation or pro- 
fessional limited liability company ; 

(3) the names and addresses of all the 
officers, directors, and shareholders^ or 
members ; and 

(4) the names and addresses of all the 
employees and managers of the corpo- 
ration or professional limited liability 
company licensed by the Board under 
the provisions of Chapter 93 of the 
General Statutes of North Carolina. 

Statutory Authority G.S. 558-11; 57C-1: 57C-2; 
59-84.2: 93-8: 93-1 2(7b): 93-1 2(8c). 

.0105 SUPPLEMENTAL REPORTS 

(a) The Board may request in writing such 
supplemental reports as it deems appropriate from 
any professional corporations or professional 
limited liability companies registered with the 
Board pursuant to G.S. 556^ 57C, and these 
Rules. The professional corporation or profession- 
al limited liability company shall file such reports 
with the Board's office within 30 days from the 
date it received the request. 

(b) In addition to the supplemental reports 
required by 21 NCAC 8J .0008(g), professional 
corporations or professional limited liability com- 
panies registered with the Board pursuant to G.S. 
55B and 57C shall file a certified copy of all 
amendments to the articles of incorporation or 
articles of organization within 30 days after the 
effective date of each amendment. They shall also 
file a copy of any amendment to the by-laws, 
certified to be a true copy by the secretary or an 
assistant secretary of the corporation or profession- 
al limited liability company , within 30 days after 
adoption of the amendment. 



or "professional association," or an abbreviation of 
one of the foregoing: "Corp.," "Inc.," "Ltd.," 
"Co.," "P.C," or "RA." The use of "CPA" or 
"Certified Public Accountant(3)" in the corporate 
name is encouraged, but not required. — The name 
shall also meet the rcquircmcnta in 21 NCAC 8G 
.0305 and .0306. 

(h) The corporate name of a professional limited 
liability company registered under these Rules 
shall contain the wording "professional limited 
liability company, " "professional ltd, liability co.," 
"professional limited liability co.," or "profession- 
al ltd, liability company, " or an abbreviation of 
one of the foregoing: "P.L.L.C." or "PLLC." 

(c) The use of "CPA" or "Certified Public 
Accountant(s)" in the corporate name is encour- 
aged, but not required. Any name shall also meet 
the requirements in 21 NCAC 8N .0302 and 
.0307. 



Statutory Authority G.S. 

57C-2. 



55B-5: 55B-12: 57C-1; 



SECTION .0300 - REGISTERED LIMITED 
LIABILITY PARTNERSfflPS 

.0301 REGISTERED LIMITED LIABILITY 
PARTNERSfflPS 

Any Registered Limited Liability Partnership 
created pursuant to and in compliance with G.S. 
59 shall also comply with all accountancy laws and 
rules pertaining to partnerships. 

Statutory Authority G.S 93-12: 59-84.2: 59-84.3. 



Statutory Authority G.S. 55B-12: 57C-1: 
93-12(3). 



57C-2; 



SECTION .0200 - PRACTICE 

PROCEDURES OF PROFESSIONAL 

CORPORATIONS 

.0201 CORPORATE AND PROFESSIONAL 
LLVHTED LIABILITi^ COMPANY 
NAMES 

(a) The corporate name of a professional 
corporation registered under these Rules shall 
contain the wording "corporation," "incorporated," 
"limited." "company," "professional corporation," 



1445 



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PROPOSED RULES 



SUBCHAPTER 8M - STATE QUALITY REVIEW PROGRAM 
SECTION .0100 - GEIVERAL SQR REQUIREMENTS 

.0102 REGISTRATION REQUIREMENTS 

(a) A firm which has not performed any audits, reviews or compilations during the 12 months prior to the 
year-end of the registration required by 21 NCAC 8J .0008(a) and (b) shall be exempt from the SQR program 
for the 12 months following the year-end but not from registering with the Board. 

(b) Unless exempt under Paragraph (a) of this Rule, each ongoing firm must complete an SQR within 12 
months following the year-end of each registration unless it has completed an SQR within 24 months prior 
to the year-end. 

(c) Unless exempt under Paragraph (a) of this Rule, a new firm shall complete its initial SQR within 24 
months of the date of its initial registration pursuant to 21 NCAC 8J .0008(a). 

(d) Every firm not exempt from SQR by Paragraph (a) of this Rule, after completion of a quality review, 
must procure an affidavit signed by the review team captain,, or other documentation that ]s considered 
acceptable by the Board, stating that the firm has completed an SQR or one of the review programs listed or 
referred to in 21 NCAC 8M .0104. The firm shall submit the affidavit or documentation with the annual 
registration following the review as set forth in 21 NCAC 8J .0008(c)(2). 

(e) For purposes of this Rule, an SQR is complete when the review team has delivered its report required 
by 21 NCAC 8M .0307 to the reviewed firm. Any quality review other than SQR is complete when the 
review team has delivered its final report to the reviewed firm. If mailed, a report shall be deemed delivered 
when postmarked. 

Note: For example, firm C was incorporated on June 1 , year one. During that year it performed accounting 
and auditing services and, therefore, was not exempt from the SQR program. It continued to do auditing and 
accounting work for the next three years (years two, three and four) but it did not do any audits, reviews, or 
compilations in years five and six. In year seven, the firm completed several compilations but, in year eight, 
it did not issue any audits, reviews, or compilations. In year nine, the corporation dissolved, at which time 
it notified the Board of its dissolution pursuant to 21 NCAC 8J .0008(g). The following chart shows the 
history of firm C as it relates to the SQR program, SQR fees it was required to pay pursuant to 21 NCAC 
8J .0010, and when and why it was required to complete an SQR pursuant to this Rule. 



Year 



Audits, Reviews or 
Compilations Performed 



Fee 



Completion of SQR 
Required and Rationale 



Yes 



Yes 



SQR Fee 



SQR Fee 



A new firm has 24 months to 
complete SQR - 21 NCAC 8M 
.0102(c); the firm is required to 
complete SQR before June 1, 
year 3. 



Yes 



SQR Fee 



Completes SQR on May 15, year 
3 (within 24 months of its incep- 
tion) 21 NCAC 8M .0102(c). 



Yes 



SQR Fee 



Not required to complete SQR in 
year 5 because the firm complet- 
ed SQR on May 15, year 3 (with- 
in 24 months of year-end of year 
4) - 21 NCAC 8M .0102(b). 



No 



Exempt Fee 



Will not be required to complete 
SQR in year 6 because it is ex- 
empt - 21 NCAC 8M .0102(a). 



No 



Exempt Fee 



Not required to complete SQR in 



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1446 



PROPOSED RULES 



Yes 



No 



SQR Fee 



Exempt Fee 



year 7 because it is exempt - 21 
NCAC 8M .0102(a). 

Will be required to complete SQR 
in year 8 because it has not com- 
pleted SQR within 24 months of 
year-end of year 7 (last SQR vs 
completed May 15, year 3) - 21 
NCAC 8M .0102(b). 

Completes SQR pursuant to its 
registration in year 7-21 NCAC 
8M .0102(b). 



Yes 



No Fee 



Not required to register or pay a 
fee at year-end of year 9 because 
firm dissolved during year 9 and 
properly notified the Board - 21 
NCAC 8J .0008(g). 



Statutory Authority G.S. 93-1 2(7b): 93-1 2(8c). 

SECTION .0200 - DUTIES OF THE 
REVIEWED FIRM 

.0201 SELECTION OF ENGAGEMENTS TO 
BE REVIEWED 

(a) Each office of the reviewed firm not excused 
under 21 NCAC 8M .0204 shall select a set of 
three engagements to be submitted for review. 

(b) A set of engagements for review shall 
include the accountant's report and financial 
statements for one audit, one review, and one 
compilation, if these three levels of service have 
been performed by the office within the 12 months 
preceding the year-end. 

(1) If one or more levels of service have 
not been performed, the office shall 
select reports of the next highest level 
of service for a total of three reports 
submitted. 

(2) If, of the three levels of service, only 
compilations have been performed by 
the office, the set of three engagements 
shall include at least one compilation 
report on a complete set of financial 
statements which includes disclosures 
and one compilation report on a finan- 
cial statement where management has 
elected to omit substantially all of the 
disclosures normally required by gener- 
ally accepted accounting principles set 
forth in 21 NCAC 8G .0202 8N 
■0209 , if both types of compilations are 
performed. 



(c) The review team captain: 

(1) must have five years' experience or 
more as a CPA in the accounting and 
auditing function; 

(2) must be a member or employee of a 
firm which has completed an SQR or 
other quality review listed or referred 
to in 21 NCAC 8M .0104 within the 
last three years but which has not 
received an adverse report on its most 
recent quality review; 

(3) must be a manager (or the equivalent) 
within his/her firm; and 

(4) must have day-to-day involvement in 
auditing and accounting procedures 
which is sufficiently comprehensive to 
enable him/her to perform and oversee 
the SQR with professional expertise. 

(d) If a firm to be reviewed does a governmental 
audit, it shall be included in the set of 
engagements. 

Statutory Authority G.S 93-1 2(8c). 

SECTION .0300 - REVIEW TEAM: 
QUALIFICATIONS AND DUTIES 

.0301 QUALIFICATIONS OF REVIEWERS 
AND TEAM CAPTAINS 

(a) A reviewer must be a CPA on active status 
licensed in any state of the United States, be in 
good standing with the CPA boards by which (G)hc 
« they are licensed to practice public accounting . 



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PROPOSED RULES 



possess current knowledge of the code of 
professional ethics and conduct, and possess 
current knowledge of the accounting and auditing 
standards applicable to the engagements to be 
reviewed by him/her them . However, (a)he one 
need not possess knowledge of the applicable 
accounting and auditing standards with regard to 
every engagement involved in the review, unless 
( s )hc one is the only member of a review team. 

(b) A reviewer shall not have been disciplined 
for violation of 21 NCAC 8 G .0311 or .0312 8N 
.0202 or .0408 within the five years preceding the 
date the review engagement is entered. 

(c) The review team captain: 

(1) must have five years' experience or 
more as a CPA in the accounting and 
auditing function; 

(2) must be a member or employee of a 
firm which has completed an SQR or 
other quality review listed or referred 
to in 21 NCAC 8M .0104 within the 
last three years but which has not 
received an adverse report on its most 
recent quality review; 

(3) must be a manager (or the equivalent) 
within his/her their firm; and 

(4) must have day-to-day involvement in 
auditing and accounting procedures 
which is sufficiently comprehensive to 
enable him/her one to perform and 
oversee the SQR with professional 
expertise. 

Statutory Authority G.S. 93-12(8c). 

.0304 PERFORMING THE REVIEW - 
REVIEWER'S DUTIES 

(a) The objective of the review shall be to 
determine that the financial statements and related 
accountant's report on the audit, review or 
compilation engagements submitted for review do 
not depart in a material respect from the 
requirements of professional standards set forth in 
21 NCAC 8 .0201 .0203 and 8 G .0208 .0212 
8N .0209-.0211. .0304. and .0403-.0406 . 

(b) The review team shall read the financial 
statements submitted by the participating firm and 
the accountant's audit, review or compilation 
report thereon. 

(c) The review team must determine whether 
each of the accountant's report and financial 
statements conform with the applicable 
professional standards set forth in 21 NCAC 8G 

■ 0201 .0203 ftftd 8G .0208 .0212 8N 

.0209-.0211. .0304. and .0403-.0406 . 



Statutory Authority G.S. 93-1 2(8c). 

SUBCHAPTER 8N - PROFESSIONAL 
ETHICS AND CONDUCT 

SECTION .0100 - SCOPE AND 
APPLICABILITY 

.0101 SCOPE OF THESE RULES 

(a) The rules in this Subchapter are the rules of 
professional ethics and conduct which G.S. 
93-12(9) authorizes the Board to adopt. As such, 
thev complement the other statutory causes for 
discipline set out in G.S. 93-12 (9) (a) through id) 
and other provisions of G.S. 93. 55B. 57C. and 
59-84. These Rules cover a broad range of 
behavior and do not enumerate every possible 
unethical act. 

(b) In the interpretation and enforcement of 
these Rules, the Board will give consideration, but 
not necessarily dispositive weight, to relevant 
interpretations, rulings and opinions issued by the 
boards of other jurisdictions and by a ppropriately 
authorized ethics committees of professional 
organizations. 



Statutory Authority G. S. 
93-12(9). 



.0102 



55B-12; 57C-2-01; 



APPLICABILITY AND 
ORGANIZATION OF RULES 

These Rules are generally applicable to all 
certificate holders. Rules in Section .0200 of this 
Subchapter relate to CPAs whether or not 
employed in the public practice of accountancy. 
Rules in Section .0300 of this Subchapter pertain 
to CR^s using the CPA title in connection with 
providing products or services to clients. Rules in 
Section .0400 of this Subchapter pertain to CPAs 
whenever engaged in attest services. 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

.0103 CPAs OUTSIDE NORTH CAROLINA 

A CPA living and working outside North 
Carolina and not rendering services for North 
Carolina clients is not subject to discipline for 
departing from North Carolina's professional 
standards as long as the CPA complies with any 
jurisdiction's accountancy laws. rules. or 
professional standards applicable to the CPA. 
However, when a CPA is associated with financial 
statements in such a manner as to imply that the 
CPA is acting as an independent public accountant 



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1448 



PROPOSED RULES 



and under circumstances that would entitle the 
reader to assume that United States practices were 
followed, the CPA must comply with the 
requirements set forth in 2\ NCAC 8N .0402. 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

.0104 RESPONSIBILITY FOR 

COMPLIANCE BY OTHERS 

A CPA shall be responsible for assuring 
compliance with the rules in this Subchapter by 
anyone who is the CPA's partner, fellow 
shareholder, or unlicensed principal, or whom the 
CPA supervises. A CPA or CPA firm shall not 
permit others (including affiliated entities) to carry 
out on the CPA's behalf, with or without 
compensation, acts which if carried out by the 
CPA would be a violation of these Rules. A CPA 
firm shall be responsible for assuring compliance 
with these Rules by any officer, director, 
shareholder. unlicensed principal. partner, 
proprietor, employee, or agent. 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

SECTION .0200 - RULES APPLICABLE TO 
ALL CPAs 

.0201 EVTEGRITY 

The reliance of the public and the business 
community on sound financial reporting and advice 
on business afi^airs imposes on the accounting 
profession an obligation to maintain high standards 
of technical competence. moralit\'. and integrity. 
To this end, a CPA shall at aH times maintain 
independence of thought and action, hold the 
affairs of their clients in strict confidence, strive 
continuously to improve their professional skills, 
observe generally accepted accounting principles 
and standards, promote sound and informative 
financial reporting, uphold the dignity and honor 
of tlie accounting profession, and maintain high 
standards of personal conduct. 

Statutory Authority- G.S. 55B-12: 57C-2-01; 
93-12(9). 

.0202 decepttvt: conduct prohibtted 

(a) Deception Defined. A CPA shall not engage 
in decepti\e conduct. Deception includes fraud or 
misrepresentation and representations or omissions 
which a CPA either knows or should know have a 
capacity or tendency to deceive. Deceptive 



conduct is prohibited whether or not anyone has 
been actually deceived. Deception includes not 
only deceptive statements but also includes the 
knowing failure to disclose material facts. 

Cb) Prohibited Deception. Prohibited conduct 
under this Section includes but is not limited to 
deception in: 

(1) obtaining or maintaining employment: 

(2) obtaining or keeping clients; 

(3) obtaining or maintaining certification, 
retired status, or exemption from SQR; 

(4) reporting CPE credits; 

(5) certifying the character or experience of 
exam or certificate applicants; 

(6) implying abilities not supported by 
valid education. professional 
attainments, or licensing recognition; 

(7) asserting that services or products sold 
in connection with use of the CPA title 
are of a particular quality or standard 
when they are not; 

(8) creating false or unjustified expectations 
of favorable results; 

(9) using or permitting another to use the 
CPA title in a form of business not 
permitted by the accountancy laws or 
rules; 

(10) permittin g a person or firm not certified 
in this state (including one licensed in 
another state) to unlawfully use the 
CPA title in this state; or 

(1 1) falsif\'ing a review, report, or any 
required program or checklist of any 
quality review program. 

Statutory Authority G.S. 55B-12: 57C-2-01; 
93-12(9). 

.0203 DISCREDITABLE CONDUCT 
PROHIBITED 

(a) Discreditable Conduct. A CPA shall not 
engage in conduct discreditable to tlie accounting 
profession. 

(h) Prohibited Discreditable Conduct. 

Discreditable conduct includes but is not limited 
to: 

(1) acts that reflect adversely on the CPA's 
honesty. integrity. trustworthiness, 
good moral character, or fitness as a 
CPA in other respects: or 

(2) stating or implying an ability to 
improperly influence a governmental 
agency or official. 

Statuton- Authority- G.S. 55B-12: 57C-2-01; 



1449 



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PROPOSED RULES 



93-12(9). 

.0204 DISCIPLINE BY FEDERAL AND 
STATE AUTHORITIES 

(a) Violations of Other Authorities' Laws or 
Rules. A CPA shall not act in a way that would 



cause said CPA to be disciplined by federal or 
state agencies or boards for violations of laws or 
rules on ethics. CPAs who engage in activities 
regulated by other federal or state authorities 
(including but not limited to the following 
agencies: IRS. Department of Revenue, SEC. State 
Bar. North Carolina Secretary of State. 
Department of Insurance. GAP. HUD, State 
Auditor. State Treasurer, or Local Government 
Commission) must comply with all such 
authorities' ethics laws and rules. 

(b) Prima Facie Evidence. A conviction or final 
finding of unethical conduct by a competent 
authority is prima facie evidence of a violation of 
this Rule. 

(c) Notice to the Board Required. A CPA shall 
notify the Board in writing within 30 days of any 
conviction or final finding of unlawful conduct by 
any federal or state court or regulatory authority. 



Statutory Authority G. S. 
93-12(9). 



55B-12: 57C-2-01; 



.0205 CONFIDENTIALITY 

(a) Nondisclosure. A CPA shall not disclose 
any confidential information obtained in the course 
of employment or a professional engagement 
except with the consent of the employer or client. 

fb) Exceptions. This Rule shall not be 
construed: 

(1) to relieve a CPA of any report 
obligations pertaining to Section .0400 
of this Subchapter; or 

(2) to affect in any way the CPA's 
compliance with a validly issued 
subpoena or summons enforceable by 
this Board or by order of a court; or 

(3) to preclude the CPA from responding to 
any inquiry made by the AICPA Ethics 
Division or Trial Board, by a duly 
constituted investigative or disciplinary 
body of a state CPA society, or under 
state statutes; or 

(4) to disclose confidential client 
information necessary for the SQR 
process or for any quality review 
program . 

Statutory Authority G.S. 55B-12: 57C-2-01; 



93-12(9). 

.0206 COOPERATION WITH BOARD 
INQUIRY 

A CPA shall fully cooperate with the Board in 
connection with any inquiry it shall make. Full 
cooperation includes fully responding in a timely 
manner to all inquiries of the Board or 
representatives of the Board and claiming Board 
correspondence from the U.S. Postal Service. 



Statutory Authority G. S. 
93-12(9). 



55B-12; 57C-2-01: 



.0207 VIOLATION OF TAX LAWS 

A CPA shall not knowingly violate any state or 
federal tax laws in handling the CPA's personal 
business affairs, or the business affairs of an 
employer or client, or the business affairs of any 
company owned by the CPA. 

Statutory Authority G.S. 93-12(9). 

.0208 REPORTING CONVICTIONS, 

JUDGMENTS, AND DISCIPLINARY 
ACTIONS 

(a) Criminal Actions. A CPA shall notify the 
Board within 30 days of any conviction or finding 
of guilt of, or pleading of nolo contendere to: 

(1) a felony; or 

(2) any crime an essential element of which 
is dishonesty, deceit, fraud, a violation 
of federal or state tax law, or a 
violation of the rules of Professional 
Ethics and Conduct contained in this 
Subchapter. 

{b} Civil Actions. A CPA shall notify the Board 
within 30 days of any judgment or settlement m a 
civil suit, the basis of which is grounded upon an 
allegation of gross negligence, dishonesty, fraud, 
misrepresentation, incompetency, or violation of 
any federal or state tax law and which was brought 
against either the CPA or a firm by which the 
CPA was employed or of which the CPA was a 
member. 



Statutory Authority G. S. 
93-12(9). 



55B-12; 57C-2-01; 



.0209 ACCOUNTING PRINCIPLES 

(a) Generally Accepted Accounting Principles. 
A CPA shall not express an opinion that financial 
statements are presented in conformity with 
generally accepted accounting principles if such 
statements contain any departure from an 



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November 1, 1993 



1450 



PROPOSED RULES 



accounting principle which has a material effect on 
the statements taken as a whole, unless the CPA 
can demonstrate that due to unusual circumstances 
the financial statements would otherwise have been 
misleading. 

(b) Statements of Financial Accounting 

Standards. The Statements of Financial 

Accounting Standards, together with those 

Accounting Research Bulletins and Accounting New York. NY 10036 as part of the "AICPA 

Principles Board Opinions which are not Professional Standards." They are available at 



statements must be justified by those who do not 
follow them. 

(e) Copies of Standards. Copies of the 
Statements on Standards for Accountants' Services 
on Prospective Financial Information may be 
inspected in the offices of the Board as described 
in 21 NCAC 8A .0102. Copies may be obtained 
from the AICPA. 121 1 Avenue of the Americas, 



superseded by action of the FASB. are hereby 
adopted by reference, as provided by G.S. 
150B-21.6. and shall be considered generally 
accepted accounting principles for the purposes of 
Paragraph (a) of this Rule. 

(c) Departures. In such cases the CPA's report 
must describe the departure, the approximate 
effects thereof, if practicable, and the reasons why 
compliance with the principle would result in a 
misleading statement. 

(d) Copies of Standards. Copies of the 
Statements of Financial Accounting Standards may 
be inspected in the offices of the Board, as 
described in 21 NCAC 8A .0102. Copies may be 
obtained from the FASB. High Ridge Park. Post 
Office Box 3821. Stamford. CT 06905-0821 as 
part of the "FASB Accounting Standards." They 
are available at cost, which is approximately 
thirty-four dollars ($34.00) in paperback form or 
three hundred eighty-three dollars ($383.00) in 
looseleaf subscription form. 



Statutory Authority G. S. 
93-12(9). 



55B-12; 57C-2-01; 



.0210 FORECASTS 

(a) Forecast of Future Transactions. A CPA 
shall not permit the CPA's name to be used in 
conjunction with any forecast of future transactions 
in a manner which may lead to the belief that the 



CPA vouches for the achievability of the forecast. 

(b) Applicable Standards. A CPA shall not 
render services associated with prospective 
financial statements unless the CPA has complied 
with the standards for accountants' services on 
prospective financial information. 

(c) Statements on Standards. The Statements on 
Standards for Accountants' Services on Prospective 
Financial Information issued by the AICPA are 
adopted by reference, as provided by G.S. 
150B-21 .6. and shall be considered as the 
approved standards for services on prospective 
financial information for the purposes of Paragraph 
(b) of this Rule. 

(d) Departures. Departures from such 



cost, which is approximately twenty-eight dollars 
($28.00) in paperback form or two hundred dollars 
($2(30. (X)) in looseleaf subscription form. 



Statutory Authority G.S. 55B-12; 

93-12(9). 



57C-2-01; 



.0211 RESPONSIBILITIES IN TAX 
PRACTICE 

(a) Standards for Tax Services. A CPA shall 
not render services in the area of taxation unless 
the CPA has complied with the standards for tax 
services. 

(b) Statements on Responsibilities. The 
Statements on Responsibilities in Tax Practice 
issued by the AICPA are hereby adopted by 
reference, as provided by G.S. 150B-21.6. and 
shall be considered as the approved standards for 
tax services for the purposes of Paragraph (a) of 
this Rule. 

(c) Departures. Departures from such 
statements must be justified by those who do not 
follow them. 

(d) Copies of Standards. Copies of the 
Statements of Responsibilities in Tax Practice may 
be inspected in the offices of the Board, as 
described in 2\_ NCAC 8A .0102. Copies may be 
obtained from the AICPA. 121 1 Avenue of the 
Americas. New York. NY 1(X)36 as part of the 
"AICPA Professional Standards. " They are 
available at cost, which is approximately 
twenty-eight dollars ($28.00) in paperback form or 
two hundred dollars ($200.00) in looseleaf 
subscription form. 

Statutory Authority 
93-12(9). 



G.S 55B-12; 57C-2-01; 



mil COMPETENCE 

A CPA shall perform professional services 
competently and shall: 

( I) undertake only those engagements which 
the CPA or CPA's firm can reasonably 
expect to complete with professional 
competence; 



1451 



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NORTH CAROLINA REGISTER 



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PROPOSED RULES 



(2) exercise due professional care in the 
performance of an engagement^ 

(3) adequately plan and supervise an engage- 
ment; and 

(4) obtain sufficient relevant data to afford a 
reasonable basis for conclusions or rec- 
ommendations in relation to an engage- 
ment. 



Statutory Authority G. S. 
93-12(9). 



55B-12; 57C-2-01; 



.0213 OTHER RULES 

A CPA shall not willfully violate any other rule 
in this Chapter nor any other provision of the 
Accountancy Statutes, the Professional Corporation 
Act, or the North Carolina Limited Liability 
Company Act. 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

SECTION .0300 - RULES APPLICABLE TO 

ALL CPAs WHO USE THE CPA TITLE IN 

OFFERING OR RENDERING PRODUCTS 

OR SERVICES TO CLIENTS 

.0301 PROFESSIONAL JUDGMENTT 

(a) Professional Judgment. A CPA shall not 
subordinate the CPAs professional judgment to 
non-CPAs. 

(b) Tax Practice. In tax practice, the CPA may 
resolve doubt in favor of the CPA's client as long 
as there is reasonable support for the CPA's 
position. 

Statutory Authority G.S. 55B-12; 57C-2-01: 
93-12(9). 

.0302 FORMS OF PRACTICE 

(a) Authorized Forms of Practice. A CPA shall 
not directly or indirectly ofFer or render 
accounting services (including tax and management 
advisory services) to clients except through a duly 
authorized CPA sole proprietorship, partnership of 
CPAs. CPA Professional Corporation. Professional 
Limited Liability Company, or Registered Limited 
Liability Partnership. 

(b) Authorized Partners. A CPA shall not 
engage in the public practice of accountancy with 
a partner who is anyone other than the holder of 
an unrevoked and currently valid CPA certificate. 

(c) Ancillary Practice. A CPA may, through 
another lawful form of professional practice, offer 
or render such non-attest accounting services as 



are ancillary to another learned profession 
regulated by a statutorily authorized licensing 
board in this state; further provided, the CPA 
offers or renders those services through a business 
form authorized by the respective licensin g board 
and does not hold out the non-CPA firm as CPA 
firm. Any such CPA must nevertheless register 
for SQR as aa exempt individual practitioner. 

(d) Other Forms. This Rule does not prohibit a 
CPA from providing sales or services to clients 
through other business forms so long as the CPA 
does not directly nor indirectly use the CPA title 
in any way in connection with said business and 
the business does not sell to or service the CPA's 
accounting clients. 

(e) Unlicensed Principals. A CPA may practice 
in a firm that includes unlicensed principals only 

if: 

the unlicensed principal is not a 
member of the firm under G.S. 93-4; 



12} 
13} 



the unlicensed principal has no 
supervision authority over CPAs; 
the unlicensed principal does not use 
the CPA title, is not licensed in another 
state, and is not listed in advertising, 
directories, signs, or stationery in a 
way that implies the unlicensed 
principal is a CPA; 

(4) the unlicensed principal does not have 
ownership interest in more than one 
firm; 

(5) actively licensed CPAs have two-thirds 
ownership and control of management 
of the firm; 

(6) unlicensed principals do not assume 
responsibilities in the attest areas; 

(7) unlicensed principals possess at least a 
baccalaureate degree and, beginning in 
the year 2001. obtain 150 semester 
hours of education at an accredited 
college or university; 

(8) unlicensed principals are at all times 
active participants and not passive 
investors; and 

(9) unlicensed principals are of good moral 
character and adhere to all applicable 
rules of professional ethics and conduct. 

(f) Firm Registration Required. A CPA shall 
not engage in the public practice of accountancy 
through a firm which is in violation of the 
registration requirements of 21 NCAC 8J .0008. 
8J .0010. or the SQR requirements of 2i NCAC 
8M .0102. 

(g) Supervision of CPA Offices. Every CPA 
office or CPA firm in North Carolina shall be 



8:15 



NORTH CAROLINA REGISTER 



November I, 1993 



1452 



PROPOSED RULES 



actively and locally supervised by a designated 
actively licensed North Carolina CPA whose 
primary responsibility and a corresponding amount 
of time shall be work performed m that office- 



judicial proceedings or the findings of 
governmental agencies. 



Statutory Authority G. S. 
93-12(9). 



.0303 



55B-12; 57C-2-01; 



OBJECTIVITY AND CONFLICTS OF 
INTEREST 

(a) Personal Financial Interest in Advice. When 
offering or rendering accounting or related 
financial, tax, or management advice, a CPA shall 
be objective and shall not place the CPA's own 
financial interests nor the financial interests of a 
third party ahead of the legitimate financial 
interests of the CPAs client or the public in any 
context in which a client or the public can 
reasonably expect objectivity from one using the 
CPA title. 

(b) Expectation of Objectivity Presumed. If the 
CPA uses the CPA title in any way to obtain or 
maintain a client relationship, the Board will 
presume the reasonable expectation of objectivity. 

(c) Acceptance of a Commission or Referral 
Fee. A CPA shall not gay a commission to obtain 
a client, nor accept a commission for a referral to 
a client, of products or services of others. This 
Rule shall not prohibit payments for the purchase 
of an accounting practice, retirement payments to 
individuals formerly engaged in the practice of 
public accounting, or payments to their heirs or 
estates. 

(d) Acceptance of a Contingent Fee. 

(1) The offering or rendering of 
professional services for, or the receipt 
of. a disclosed contingent fee by a CPA 
is not prohibited except for engaging to 
render or rendering by a CPA for a 
contingent fee: 

(A) of professional services for, or the 
receipt of such a fee from, any person 
for whom the CPA also performs 
attest services, during the period of 
the attest services engagement and the 
period covered by any historical 
financial statements involved in such 
attest services; and 

(B) for the pre paration of original or 
amended tax returns or claims for tax 
refunds. 

(2) Fees are not regarded as being 
contingent if fixed by courts or other 
public authorities qr^ in tax matters, if 
determined based on the results of 



Statutory Authority 
93-12(9). 



.0304 



as 55B-12; 57C-2-01; 



MANAGEMENT ADVISORY 
SERVICES STANDARDS 

(a) Standards for Management Advisory 
Services. A CPA shall not render management 
advisory services unless the CPA has complied 
with the standards for management advisory 
services. 



(b) Statements on Standards for Management 
Advisory Services. The Statements on Standards 
for Management Advisory Services (including the 
definition of such services) issued by the AICPA 
are hereby adopted by reference, as provided by 
G.S. 150B-21 .6, and shall be considered as the 
approved standards for management advisory 
services for the purposes of Paragraph (a) of this 
Rule. 

(c) Departures. Departures from such 
statements must be justified by those who do not 
follow them. 

(d) Copies of Statements. Copies of the 
Statements on Standards for Management Advisory 
Services may be inspected in the offices of the 
Board, as described in 21 NCAC 8A .0102. 
Copies may be obtained from the AICPA, 1211 
Avenue of the Americas, New York, NY 10036 as 
part of the "AICPA Professional Standards." They 
are available at cost, which is approximately ten 
dollars ($10.00) in paperback form or two hundred 
dollars ($200. (X)) in looseleaf subscription form. 



Statutory Authority G. S. 
93-12(9). 



55B-12: 57C-2-01: 



.0305 RETENTION OF CLIENT RECORDS 

(a) Return upon Demand. A CPA must return 
client records in their possession to the client after 
a demand is made for their return. If the client '\s 
a partnership, records shall be returned upon 
request to any of its general partners. If the client 
is a corporation, records shall be returned upon 
request to its president. Joint records are to be 
returned upon request to any party. The records 
must be returned immediately upon demand unless 
circumstances make some delay reasonable jn 
order to retrieve a closed file or to extract the 
CPAs work papers described in Paragraph (e) of 
this Rule. If the records cannot be returned 
immediately upon demand, the CPA will 
immediately notify the client of the date the 



1453 



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NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



records will be returned. Nothing in this Rule 
shall be interpreted to require a CPA to pay 
delivery costs when the records are returned to the 
client and the business does not sell or serve to the 
CPAs. 



(b) Return of Original Records. If a CPA is 
engaged to perform certain work for a client, the 
CPA is only required to return or furnish copies of 
those records originally given to the CPA by the 
client if one of the following occurs: 

(1) the engagement is terminated prior to 
the completion of such work, or 

(2) the CPA's work product has neither 
been received nor paid for by the 
client. 

(c) Retention to Force Payment. A CPA shall 
not retain a client's records in order to force 
payment of any kind. 

(d) Work Papers Included in Client Records. 
Work papers are usually the CPA's property and 
need not be surrendered to tlie client. However. 
in some instances work papers will contain data 
which should properly be reflected in the client's 
books and records but for convenience have not 
been duplicated therein with the result that the 
client's records are incomplete. In such instances, 
the portion of the work papers containing such 
data constitutes part of the client's records, and 
copies should be given to the client along with the 
rest of the client's records. Work papers 
considered part of the client's records include but 



are not limited to: 

(1) Worksheets in lieu of original entry 
(e.g.. listings and distributions of cash 
receipts or cash disbursements on 
columnar work paper); 

(2) Worksheets in lieu of general ledger or 
subsidiary ledgers, such as accounts 
receivable, job cost and equipment 
ledgers, or similar types of depreciation 
records; 

(3) All adjusting and closing journal entries 
and supporting details not fully set forth 
in tlie journal entry; and 

(4) Consolidating or combining journal 
entries and worksheets and supporting 
detail used in arriving at final figures 
incorporated in an end product such as 
financial statements or tax returns. 

(e) Work Papers Belonging to the CPA. Work 
papers developed by the CPA incident to the 
performance of an engagement which do not result 
in changes to ttie client's records, or are not in 
themselves part of the records ordinarily 



solely the CPA's work papers and are not the 
property of the client. For example, the CPA may 
make extensive analyses of inventory or other 
accounts as part of the selective audit procedures. 
These analyses are considered to be a part of the 
CPA's work papers, even if the analyses have been 
prepared by client personnel at the request of the 
CPA. Only to the extent these analyses result in 
changes to the client's records would the CPA be 
required to furnish the details from the work 
papers in support of the journal entries recording 
the changes, unless the journal entries themselves 
contain all necessary details. 

(f) Reasonable Fees for Copies. Nothing in this 
Rule shall be construed to require the CPA to 
furnish a client with copies of the client's records 
already in the client's possession. However, if the 
client asserts that such records have been lost, or 
are otherwise not in the client's possession, the 
CPA shall furnish copies of the records within a 
reasonable time for a fee. 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

.0306 ADVERTISING OR OTHER FORMS 
OF SOLICITATION 

(a) Deceptive Advertising. A CPA shall not 
seek to obtain clients by advertising or using other 
forms of solicitation in a manner that is deceptive. 

(b) Specialty Designations. A CPA may 
advertise the nature of services provided to clients 
but the CPA shall not advertise or indicate a 
specialty designation or other title unless the CPA 
has met the requirements of tlie granting 
organization for the separate title or specialty 
designation. 



Statutory Authority G. S. 
93-12(9). 



55B-12; 57C-2-01; 



maintained by such clients, are considered to be 



.0307 FIRM NAMES 

(a) Deceptive Names Prohibited. A CPA or 
CPA firm shall not trade upon the CPA title 
through use of any name that would have the 
capacity or tendency to deceive. 

(h) Style of Practice. It is considered 
misleading if a firm practices under a name or 
style which would tend to imply the existence of a 
partnership or registered limited liability 
partnership or a professional corporation or limited 
liability company of more than one shareholder or 
member or an association when in fact there is no 
partnership nor is there more than one shareholder 
or member in tlie firm. For example, no firm 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1454 



PROPOSED RULES 



having just one owner may have as a part of its 
name the words "associates" or "company" or 
their abbreviations. 

(c) Assumed Names Subject to Approval. 
Before any firm uses an assumed name (as de- 
scribed in G S^ 66-68) it must submit the proposed 
name for Board approval . 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

SECTION .0400 - RULES APPLICABLE TO 
CPAs PERFORMING ATTEST SERVICES 

.0401 PUBLIC RELIANCE 

Certain practice rules only regulate those CPAs 
who perform services upon which the public relies. 
These Rules apply to any CPA who engages in the 
attest functions such as audit, compilation, review, 
exam, forecast, and projection, as defined m 21 
NCAC 8A .0301(b). CPAs who engage in such 
services are also subject to the SQR requirements 
of Subchapter 8M. 

Statutory: Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

.0402 INDEPENDENCE 

(a) A CPA. or their firm, who is performing an 
engagement in which the CPA. or their firm, will 
issue a report on financial statements of any client 
(other than a report in which lack of independence 
is disclosed) must be independent with respect to 
the client in fact and appearance. 

(b) Independence is impaired ifj for example, 
during the period of the professional engagement. 
or at the time of issuing the report, the CPA or 
their firm: 

(1) had or was committed to acquire any 
direct or material indirect financial 
interest in the client; 

(2) was a trustee of any trust or executor or 
administrator of any estate that bad or 
was committed to acquire any direct or 
material indirect financial interest in the 
client; 

(3) had a joint or closely held business 
investment with the client or any 
officer. director. or principal 
stockholder thereof which was material 
in relation to the net worth of the 
client, the CPA. or their firm; or 

(4) had any loan to or from the client or 
any officer, director, or principal 
stockholder thereof other than loans of 



the following kinds made by a financial 
institution under normal lending 
procedures, terms, and requirements: 

(A) loans obtained by the CPA or their 
firm which are not material in relation 
to the net worth of the borrower; 

(B) home mortgages; and 

(C) other secured loans. 



except those 

secured solely by a guarantee of the 

CPA or their firm. 

(c) Independence will also be considered to be 

impaired if^ during the period covered by the 

financial statements, during the period of the 

professional engagement, or at the time of issuing 

the report, the CPA: 



m 



was connected with the client as a 



promoter, underwriter, 
director, officer, or 
equivalent to that of 



voting trustee. 

in any capacity 

a member of 



management or of an employee; or 
(2) was a trustee for any person 



or 



profit-sharing trust of the client, 
(d) The examples in this Rule are not intended 
to be all-inclusive. 

Statutory Authority G.S 55B-12; 57C-2-01; 
93-12(9). 

.0403 AUDITING STANDARDS 

(a) Standards for Auditing Services. A CPA 
shall not render auditing services unless the CPA 
has complied with the applicable generally 
accepted auditing standards. 

(b) Statements on Auditing Standards. TTie 
Statements on Auditing Standards issued by the 
AICPA are hereby adopted by reference, as 
provided by G.S. 150B-21.6. and shall be 
considered generally accepted auditing standards 
for the purposes of Paragraph (a) of this Rule. 

(c) Departures. Departures from such 
statements must be justified by those who do not 
follow them. 

(d) Copies of Statements. Copies of the 
Statements on Auditing Standards may be 
inspected in tlie offices of the Board, as described 
in 21 NCAC 8A .0102. Copies may be obtained 
from the AICPA. 121 1 Avenue of the Americas. 
New York. NY 10036 as eart of the "AICR\ 
Professional Standards." They are available at 
cost, which is approximately twenty-eight dollars 
($28.00) in paperback form or two hundred dollars 
($200. (X)) in looseleaf subscription form. 



Statutory Authority G. S. 
93-12(9). 



553-12: 57C-2-01; 



1455 



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NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



.0404 ACCOUNTING AND REVIEW 
SERVICES STANDARDS 

(a) Standards for Accounting and Review 
Services. A CPA shall not render accounting and 
review services unless the CPA has complied with 
the standards for accounting and review services. 

(b) Statements on Standards for Accounting and 
Review Services. The Statements on Standards for 
Accounting and Review Services issued by the 
AICPA are hereby adopted by reference, as 
provided by OS, 150B-21.6. and shall be 
considered as the approved standards for 
accounting and review services for the purposes of 
Paragraph (a) of this Rule. 

(c) Departures. Departures from such 
statements must be justified by those who do not 
follow them. 

(d) Copies of Statements. Copies of the 
Statements on Standards for Accounting and 
Review Services may be inspected in the offices of 
the Board, as described in 2\ NCAC 8A .0102. 
Copies may be obtained from the AICPA. 1211 
Avenue of the Americas. New York. NY 10036 as 
part of the "AICPA Professional Standards." They 
are available at cost, which is approximately 
twenty-eight dollars ($28.00) in paperback form or 
two hundred dollars ($200.00) in looseleaf 
subscription form. 

Statutory Authority G.S. 55B-J2; 57C-2-01; 
93-12(9). 

.0405 GOVERNMENTAL ACCOUNTING 
STANDARDS 

(a) Standards for Governmental Accounting. A 
CPA shall not permit the CPAs name to be 
associated with governmental financial statements 
for a client unless they have complied with the 
standards for governmental accounting. 

(b) Statements on Governmental Accounting and 
Financial Reporting Services. The Statements on 
Governmental Accounting and Financial Reporting 
Services issued by the GASB are hereby adopted 
by reference, as provided by G.S. 150B-2I.6. and 
shall be considered as the approved standards for 
governmental accounting for the pur poses of 
Paragraph (a) of this Rule. 

(c) Departures. Departures from such 
statements must be justified by those who do not 
follow them. 

(d) Copies of Statements. Copies of the 
Statements on Governmental Accounting and 
Financial Reporting Standards, including technical 
bulletins and interpretations, may be inspected in 
the offices of the Board, as described in 2i NCAC 



8A .0102. Copies may be 

GASB, Post Office Box 9125 



obtained from the 
285, 



Dept. 



Stamford, CT 06925. They are available at cost, 
which is approximately forty-seven dollars and 
fifty cents ($47.50). In addition to the basic set, 
an updating subscription service is available for 
approximately sixty-five dollars ($65.00) annually. 



Statutory Authority G. S. 
93-12(9). 



55B-12: 57C-2-01: 



.0406 ATTESTATION STANDARDS 

(a) Standards for Attestation Services. A CPA 
shall not render attestation services unless the CPA 
has complied with the applicable attestation 
standards. 

(b) Statements on Standards for Attestation 
Engagements. The Statements on Standards for 
Attestation Engagements issued by the AICPA are 
hereby adopted by reference, as provided by G.S. 
150B-21.6, and shall be considered attestation 
standards for the purposes of Paragraph (a) of this 
Rule. 

(c) Departures. Departures from such state- 
ments must be justified by those who do not follow 
them. 

(d) Copies of Statements. Copies of the State- 
ments on Standards for Attestation Engagements 
may be inspected in the offices of the Board, as 
described in 21 NCAC 8A .0102. Copies may be 
obtained from the AICPA, 121 1 Avenue of the 
Americas. New York. 



'AICPA Professional 



NY 10036 as eart of the 

Standards. " They are 

available at cost, which is approximately thirty 
dollars ($30.00) in paperback form or two hundred 
dollars ($200.00) in looseleaf subscription form. 

Statutory Authority G.S 55B-12; 57C-2-01; 
93-12(9). 

.0407 COMPETITIVE BIDDING 

Regarding an invitation for competitive bids on 
attest services, it shall be discreditable for a CPA 
or CPA firm to knowingly ofl'er to perform said 
services below cost for the purposes of injuring or 
destroying competition; provided, it shall not be a 
violation to dp so in order to meet competition. 
Nothing herein shall be construed to prohibit 
competitive bidding nor establish a minimum price 
of any CPA service. 

Statutory Authority G.S. 553-12; 57C-2-01; 
93-12(9). 

.0408 QUALITY REVIEW STANDARDS 



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November 1, 1993 



1456 



PROPOSED RULES 



A CPA who is engaged to perform a quality 
review shall not violate the rules or standards of 
the quality review program under which the review 
is made or the engagement contract connected with 
that quality review. 

Statutory Authority G.S. 55B-12; 57C-2-01; 
93-12(9). 

****************** 

ISotice is hereby given in accordance with G.S. 
] 508-21. 2 that the North Carolina Board of 
Electrolysis Examiners intends to amend rule cited 
as 21 NCAC 19 .0202 and adopt rule cited as 21 
NCAC 19 .0622. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on December 6, 1994 at the State Employees 
Credit Union Building, Fourth Floor Conference 
Room, 801 Hillsborough Street. Raleigh. NC 

MXeason for Proposed Action: 

21 NCAC 19 .0202 - To account for statutory 

changes and to include provisions for licensing 

under G.S. 88A-10 and G.S 88A-11(2). 

21 NCAC 19 .0622 - To inform the public of the 

Board's requirement for certifying out-of-state 

schools. 

(comment Procedures: The record of hearing will 
be open for receipt of written comments from 
November 1, 1993 through December 6, 1993. 
Written comments must be delivered to the Board 
at its mailing address (801 Hillsborough Street, 
PO. Box 10834. Raleigh. NC 27605-0836). 
Anyone wishing to speak at the hearing should 
notify Trudy Brown in \Kriting at the Board's 
mailing address no later than 5:00 p.m. the day 
before the meeting. Anyone whose written request 
to speak is not received by this deadline will be 
able to speak only as time permits. 

EdUor's Note: 21 NCAC 19 .0202 was filed as 
a temporary amendment effective October 13, 
1993 for a period of 180 days or until the perma- 
nent rule becomes effective, whichever is sooner. 



CHAPTER 19 - BOARD OF 
ELECTROLYSIS EXAMINERS 

SECTION .0200 - APPLICATION 
PROCEDURES 

.0202 APPLICATION FOR LICENSURE 

(a) Anyone — engaged — m — the — practice — of 
clectrology in this State before January' 1. 1992, 
who seeks licen s ure a s an elcctrologist without 
examination — under — the — provi s ion s — ef — GtSv 
88 A 11(1). All applicants for licensure as an 
electrologist shall submit an application on the 
form provided by the Board, accompanied by 
proof of age, proof of practic e before January 1, 
1992. statement from ophthalmologist or optome 
trist that vision or corrected vision is sufficient to 
perform duties as an elcctrologist, recent photo- 
graph, the required application fee, any informa- 
tion required by Paragraphs (h) and (c) of this 
Rule, and if applicable, proof of completion of 
high school or equivalency certificate and certifica- 
tion of completion from each electrology institution 
attended with verification of the number of hours 
completed in theory and clinical training. 

(b) All applications for licensure under this 
Section G.S. 88A-11(1) must bei 

(1) accompanied by proof of practice be- 
fore the statutory deadline; and 

(2) either actually received by the Board or 
postmarked on or before the statutory 
deadline for applications December 31, 

(c) All applications for licensure under G.S. 
88 A- 1 1(2) must be accompanied by: 

( 1) the address of the licensing agency in 
the other state or jurisdiction; 

(2) any information such as a license num- 
ber needed to identify the applicant in 
correspondence with that agency; and 

(3) a statement authorizing that agency to 
certify to the Board that the applicant is 
currently licensed or certified by the 
other state or jurisdiction and js in good 
standing, to inform the Board whether 
there are any pending complaints about 
the applicant, and to provide the Board 
with a copy of the licensing require- 
ments in that state or jurisdiction. 

(d) fe) Proof of age shall be shown by certified 
copy of a birth certificate. If the applicant cannot 
obtain a certified copy of the birth certificate, the 
applicant shall attach an explanation why no birth 
certificate is obtainable and shall submit other 
proof of age. Other proof of age includes pass- 



1457 



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PROPOSED RULES 



ports, current life insurance policies held for at 
least one year showing date of birth, entries in 
family bibles, medical or school records showing 
date of birth, and marriage licenses showing age. 

(e) fd) Proof of practice before the prior practice 
deadline set in OS, 88A-ll(a) January 1, 1992 
may be shown by sworn affidavit of a person 
unrelated to the applicant stating that the applicant 
did practice electrology in North Carolina before 
that date January 1, 1992 . The affidavit shall also 
state where the a pplicant practiced. 

(f) ^ The Board may reject incomplete or 
partial applications. 

Statutory Authority G.S. 88A-6: 88A-9; 88A-10; 
88A-11(1); 88A-21. 

SECTION .0600 - SCHOOLS 

.0622 CERTIFICATION OF SCHOOLS IN 
OTHER STATES OR JURISDICTIONS 

(a) The Board will certify a school in another 
state or jurisdiction for purposes of G.S. 88 A- 10 
provided that: 

£1} The school applies for certification, 
submits the information required by 
G.S. 88A-19(a)(n-(6), and meets the 
requirements of 21 NCAC \9 .0602, 
.0606. .0607. .0608. and .0609; 

(2) If the school is in a state or jurisdiction 
that approves electrolysis schools, the 
school is approved by the proper agen- 
cy for that state or jurisdiction: and 

(3) The school has a curriculum of at least 
600 hours. 

(b) A school located in another state or jurisdic- 
tion shall pay an application fee of fifty dollars 
($50.00) and a yearly certification fee of twenty- 
five dollars ($25.00). 

(c) The Board will revoke the certification of a 
school in another state or jurisdiction upon a proof 
that the school in a jurisdiction that licenses elec- 
trologists has lost its a pproval in that state. 

(d) The school must agree to teach North 
Carolina's sanitation standards to any student who 
states to the school an intention of taking North 
Carolina's licensing examination. 



Statutory Authority G.S. 
88A-21. 



88A-6; 88A-9; 88A-19; 






* * 



A^, 



otice is hereby given in accordance with G.S. 



1508-21. 2 that the Board of Medical Examiners of 
the State of North Carolina intends to amend rules 
cited as 21 NCAC 32M . 0006 and . 0009. 

Ihe proposed effective date of this action is 
March 1, 1994. 

Ihe public hearing will be conducted at 4:30 
p.m. on November 17, 1993 at the NC Board of 
Nursing, Koger Ctr., Camden Bldg., Suite 201, 
Raleigh, NC, (919) 782-3211. 

MXeason for Proposed Action: 
21 NCAC 32M .0006 and .0009- Action is pro- 
posed to bring NC Nurse Practitioner Rules into 
conformity with national standards. 

(comment Procedures: Persons interested may 
present written or oral statements relevant to the 
actions proposed at a hearing to be held as indi- 
cated above. Written statements not presented at 
the hearing should be directed before December 1 , 
1993 to the following address: NCBME, PO Box 
26808, Raleigh, NC 2761 1 -6808. 

CHAPTER 32 - BOARD OF 
MEDICAL EXAMINERS 

SUBCHAPTER 32M - APPROVAL 
OF NURSE PRACTITIONERS 

.0006 PRESCRIBING PRIVILEGES 

(a) The NP Applicant and supervising physicians 
shall acknowledge in the application that they are 
femiliar with laws and rules regarding prescribing; 
and shall agree to comply with these laws and 
rules by incorporating the laws and rules, inolud 
ing th e Formulary, into their written standing 
orders protocols for each approved practice site. 

{b) — The gonerio oategori e a listed in the Formu 
lary are ba o od of the "American Hospital Formu 
lary Servic e " publi o h e d by th e Am e rican Soci e ty of 
Ho s pital Pharmacists. — Th e Formulary is adopted 
by refer e nce as a part of this Rule in accordance 
with provisions of G.S. 150B 1 4 (o). — Chang e s in 
th e Formulary ar e approv e d by both the Board of 
Nuraing and the Board of Medical Examiners. 

{b}{e) The prescribing stipulations contained in 
these Rules and in th e Formulary apply to writing 
prescriptions, ordering the administration of 
medications in out pati e nt and in patient settings, 
and dispensing medications. Approval to dispense 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1458 



PROPOSED RULES 



must be obtained from the Board of Pharmacy. 
(c)fd^ Prescribing stipulations are as follows: 
f4-) Controlled Substances: 

(1) Drugs and devices that may be pre- 
scribed by the NP in the approved 
practice site must be included in the 
written standing protocols as outlined in 
Rule .0009 (2) of this Section. 

(2) (A)No controlled substances Controlled 
Substances (Schedules 2, 2N, 3, 3N, 4, 
5) defined by the State and Federal 
Controlled Substances Acts may be 
prescribed, ordered, or dispensed as 
established in written standing proto- 
cols, provided all of the following 
restrictions are met: 






iCi 



dosage units limited to a one week's 
supply; 

the prescription or order may not be 
refilled without a specific written or 
N'erbal order from the supervising 
physician; and 

Verbal orders given to the NP from, 
the supervising physician for adminis 
tration of a controlled substance to a 
specific patient may be entered into 
the patient chart by the NP just as an 
RN — mey — transcribe — a — physician's 
verbal order into a patient chart. 
the NP has an assigned PEA number 
which is entered on each prescription 
for a controlled substance. 



?f=al- 



f33 Parenteral Medications — No parenter 

preparation s — wr&f — be — prescribed. — ©r- 
dcrcd. or dispensed unless under the 
order of the supervising physician as set 
forth — in Subparagraph — (3)(B) of this 
Rule with the exception of those medi 
cations — listed — efl — th« — Formulary' — as 
allowed . 

i%^ Excluded Drugs: 

<-iM — Any pure form or combination of the 
generic clas s e s of drug s li s ted in th e 
Formulary — fn&f — be — prescribed. — &f- 
d e red. or di s pensed, unless the drug 
or clas s of drug i s excluded by the 
Formulary. 
(3) fB^The NP may prescribe an e xcluded 
a drug or class of drug not included in 
the site-specific written standing proto- 
cols only as follows: 

tf) after the patient has been previ 

ously — seen — hy — the — supervising 
phy s ician for initial treatment of 
that illness and a written order has 



been entered into the chart by the 
phy s ician for future treatment by 
the NP; or 
(A)- f«-)upon a specific written or verbal 
order obtained from the supervising 
physician before the prescription or 
order is issued by the NP; and 
(B) (C)Such — a prescription the verbal or 
order written order as described in 
Paragraph (d)(3)(B) Part (c)(3)(A) of 
this Rule must be signed by the NP 
with a notation that it is issued on the 
specific order of the supers'ising 
physician. (For example: Mary' 
Smith, NP, on order of John Doe, 
M.D.) 
(4) Refills A prescription may not indicate 
a refill, unless authorized by the super 
vising physician, with the exception of 
birth control medication which may be 
issued for a period not to exceed one 
year except for controlled substances 
which are excluded from refills . 

t§3 Dosage Units Amount of drug pre 

s cribed, ordered, or dispensed can be 
no more than 100 dosage units or a one 
month supply with the exception of 
birth control medications which may be 
issued for a period not to exceed one 
year. 

(6)Prcscription Notations — E\'er}' Each 
prescription must be noted on the 
patient's chart and include the following 
information: Subsequent pre s criptions 
fef — the — same — medication — may — be 
authorized by the NP by telephone and 
must be entered on the patient's chart 
and — CO signed — by — the — supervi s ing 
physician within the s pecified 



15] 



CO s ignin g — t+me — contained 



-thr 



iA] 

m 

IE) 



appro\ed application. 
medication dose; 
amount prescribed; 
directions for use; 
number of refills; and 
signature of NP. 



(6) (7)Prcscribing — Number 



ID 



-A Ihe 

prescribing number is assigned by the 
Board of Medical Examiners to an the 
NP upon approval. — This number must 
appear on all prescriptions issued by the 
NP. The pre s cribing number is used as 
the NP's Approval Number. 
(^Prescription Blank Format: 
(A) All prescriptions issued by an the NP 



1459 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



PROPOSED RULES 



^ 



) 



I 



shall contain the supervising 
phvsician(s) name, the name of the 
patient, and the NP's name, telephone 
number of the supervising physician; 
the name, practice address, telephone 
number, and prescribing number, ef 
the NP, as well as all information 

required ^i* — tew: A — suggested 

prescription format is included in the 
application packet. 
(B) The NP's assigned PEA number shall 
be written on the prescription form 
when a controlled substance is 
prescribed as defined in Subparagraph 
(c)(2) of this Rule. 

(9) Pre signed Pre s cription Blanks The 

supervising physician shall not leave 
pre s igned prescription forms for use by 
the NR 

Authority 90-6; 90-18(14); 90-18. 2; 90-1 71. 23(14); 
58 Fed. Reg. 31,171(1993) (to be codified at 21 
C.F.R. 1301). 

.0009 SUPERVISION OF NP 

Supervision shall be provided by the responsible 
physician as follows: 

(1) Availability: 

(a) The supervising physician shall be 
continuously available for direct 
communications by radio, telephone, or 
telecommunications. 

(b) The supervising physician shall be 
available on a regularly scheduled basis 
for referrals of patients from the NP. 

(2) Written Standing Orders Protocols : 

{a) The supervising physician shall provide 

in — eaeh — practice — location — written 
standing orders and drug protocols to 
cover — most — commonly — encountered 
problem s in the practice setting for use 
by the NP and for referral by other 
personnel in the setting. 

(a) Written standing protocols approved 
and signed by both the supervising 
physician(s) and the NP shall be 
maintained in each approved practice 
site; 

(b) The written standing protocols shall 
include the drugs, devices, medical 
treatments, tests and procedures that 
may be prescribed, ordered and 



implemented by the NP consistent with 
Rule .0006 of this Section, and which 
are appropriate for the diagnosis and 



treatment of the most commonly 
encountered health problems in that 
practice setting. 

(c) fb)The written standing orders protocols 
shall include a pre-determined plan for 
emergency services. 

(d) (e^The written standing protocols shall 
specify the process by which The the 
NP shall refer a patient to another a 
physician other than an approved 

supervising physician. only m 

accordance with written — standing 

orders. 

(3) Countersigning of Medical Acts: 

(a) The maximum time interval between 
the NP's contact with the patient and 
chart review and countersigning of 
medical acts by the supervising 
physician is seven days. 

(b) Countersigning times previously 
approved by the Board remain in effect 
until a change is specifically applied for 
aft and approved in accordance with 
Rule .0004 of this Section. 

(c) A longer countersigning time interval 
may be considered by the Joint 
Subcommittee upon specific request. 
The request should explain the practice 
circumstances which necessitate the 
longer countersigning interval. 

(d) All medical entries into the patient chart 
by an NP in all approved practice 
locations must be countersigned by the 
supervising physician, including 
medical progress notes; medical 
treatment rendered; tests or procedures 
ordered; and notations of prescriptions, 
orders, or drugs dispensed. 

(4) Supervision Distance: 

(a) If the NP is to perform duties away 
from the supervising physician, the 
application must clearly specify the 
circumstances and the supervisory 
arrangements established to protect the 
patient. 

(b) Details must be submitted describing 
distance, time, topography, physical 
characteristics, and communication 
ability between the NP and the 
supervising physician. 

(5) Supervising Physicians: 

(a) A physician in a graduate medical 
education program, whether fully 
licensed or holding only a resident's 
training license, cannot be named as a 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1460 



PROPOSED RULES 



supervising physician. 

(b) A physician in a graduate medical 
education program who is also 
practicing in a non-training situation 
may supervise a NP in the non-training 
situation if fully licensed. 

(c) All physicians who may supervise the 
NP in any manner must be approved in 
accordance with this Subchapter before 
NP supervision occurs. 

(6) The NP must be prepared to demonstrate 
upon request to a member of either the 
Board of Nursing or the Board of 
Medical Examiners, or one of its 
delegates, the ability to perform the 
medical acts assigned by the supervising 
physician. 

Statutory^ Authority 90-6: 90-18(14); 90-18.2: 
90-171.23(14). 

iSotice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Board of 
Mortuary Science intends to adopt rule cited as 21 
NCAC 34B .0126; amend rules cited as 34B 
.0103. .0110, .0120 and 34D .0202. 

1 he proposed effective date of this action is 
February 1. 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on December 3, 1993 at the Board Room, 
801 Hillsborough Street, Raleigh, NC 27603. 

Ixeason for Proposed Action: 
21 NCAC 34B .0103 - To permit trainees, under 
supervision, to engage in preneed funeral planning 
and to define supervision for all trainee activities. 
21 NCAC 34B .0110 - To require trainee reports 
to include names of purchasers of preneed fimeral 
contracts. 

21 NCAC 34B .0120 - To require trainee affida\it 
to include number of preneed fimeral contracts 
sold. 

21 NCAC 34B .0126 - To require trainees in 
funeral directing and funeral service to gain 
experience in planning funerals as well as in post- 
planning activities. 

21 NCAC 34D .0202(b) - To permit trainees, 
under supervision, to sell, but not sign, preneed 



funeral contracts. 

K^omment Procedures: Interested persons max 
present statements, orally and in writing, at the 
public hearing and in writing prior to the hearing 
by mail addressed to the NC Board of Mortuary 
Science, Box 27368, Raleigh. NC 2761 1-7368. 

CHAPTER 34 - BOARD OF 
MORTUARY SCIENCE 

SUBCHAPTER 34B - FUNERAL 
SERVICE 

SECTION .0100 - RESIDENT 
TRAINEES 

.0103 AUTHORIZED PRACTICE: 
SUPERVISION 

(a) Duly certified resident trainees in training for 
fiineral service, duly certified resident trainees in 
training for funeral directing and duly certified 
resident trainees in training for embalming, while 
participating in learning experiences and while 
supervised by a person licensed by the Board as a 
funeral service licensee, funeral director or em- 
balmer, respectively, may engage in the practice of 
funeral service, funeral directing or e mbalming 
embalming, respectively. Wh e n such person so 
lic e ns e d by th e Board is not on th e pr e mises wh e re 
th e activiti e s of th e resid e nt trnintx ! ar e talcing 
plac e , th e r e sident train ee shall not bo doomed to 
b e sup e rvised as required by this Rul e . 

(b) Duly certified resident trainees in training 
for funeral service or for funeral directing, while 
participating in learning experiences and while 
supervised by a person licensed by the Board as a 
preneed sales licensee, may engage m preneed 
funeral planning. 

(c) When a resident trainee engages in funeral 
service, funeral directing, embalming or preneed 
funeral planning in or on the premises of a funeral 
home, the licensed supervisor shall be on the 
funeral home premises where and while such 
activities are performed. When a resident trainee 
engages in fiineral service, funeral directing, 
embalming or preneed funeral planning off the 
funeral home premises, such activities shall be 
performed only in the presence of the licensed 
supervisor. 

Statutory Authority^ G.S 90-21 0.23(a): 90- 
210. 25(a)(4): 90-210. 67(a): 90-210. 69(a). 



1461 



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PROPOSED RULES 



.0110 REPORTS ON WORK 

The resident trainee shall submit a report to the 
Board every three months on forms provided by 
the Board listing the work performed during the 
preceding three months. Such reports shall include 
the dates and a description of the work and must 
be certified as correct by the licensee under whom 
the trainee served during the period and by the 
manager of the funeral establishment. The names 
of the deceased persons persons, and the names of 
the purchasers of preneed funeral contracts, on 
whose cases the trainee worked and reported 
during traineeship must be retained by the trainee 
until his traineeship requirement has been fulfilled, 
and during such time such information shall be 
subject to inspection by the Board or its authorized 
agent. Such reports must be filed in the office of 
the Board not later than the 10th day of the 
calendar month which immediately follows the 
completion of each three-month period of resident 
traineeship. Failure to submit such reports when 
due shall be sufficient cause for suspension or 
revocation of the certificate of resident traineeship. 

Statutory Authority G.S. 90-21 0.23(a), (d). (f); 90- 
210.25(a) (4e) (4g); 90-210. 67(a); 90-2 10. 69(a). 

.0120 TRAINEE FINAL AFFIDAVIT 
FORM 

Form BMS-10 is the resident trainee affidavit. 
It is used for certification by the supervising 
licensee that the trainee has served and performed 
certain work under him as required by G.S. 
90-2 10. 25 (a) (4). It contains space for the names 
of the licensee and the trainee; dates and places of 
service; and the number of funcml s funerals, 
preneed funeral contracts ef and embalmings, or 
both, embalmings that the trainee has assisted in 
during traineeship. The form is filed with the 
Board upon ending resident traineeship with a 
licensed supervisor. 

Statutory Authority G.S 90-210.23(a). (d), (f); 90- 
210.25(a) (40: 90-210.67(a); 90-210.69(a). 

.0126 FUNERAL DIRECTING AND 

FUNERAL SERVICE TRAINING 

To fulfill the requirements that funeral director 
and funeral service trainees shall assist in directing 
at least 25 funerals during resident traineeship, 
such trainees shall, under supervision, perform all 
of the components of "funeral directing," as 
defined in OS, 90-210. 20(f); and to achieve this 
end such trainees shall perform, in at least 25 
cases, the activities of selling and arranging 



(whether performed at time of need or by selling 
preneed funeral contracts or a combination) and, in 
at least 25 cases, activities pertaining to the funeral 
ceremony and disposition of the body. 

Statutory Authority G.S. 90-210. 20(f); 90- 
210.23(a), (d), (f); 90-210.25(a)(4); 90-210.67(a); 
90-21 0.69(a). 

SUBCHAPTER 34D - PRENEED 
FUNERAL CONTRACTS 

SECTION .0200 - LICENSING 

.0202 PRENEED SALES LICENSE 

(a) Subject to G.S. 90-2 10. 69(c), holding a 
funeral director's license, issued by the Board, or 
a funeral service license, issued by the Board, is 
the qualification to be eligible for a preneed sales 
license. 

(b) The preneed sales licensee may engage, 
under the preneed sales license, in the following 
preneed funeral planning activities, pursuant to the 
definition of "preneed funeral planning" in G.S. 
90-210.60(8): 

(1) show and explain written materials, 
including price lists and photographs, 
descriptive of the funeral services and 
merchandise and the preneed funeral 
plan or contract being offered; 

(2) explain the various types of fiineral 
ceremonies and services and the 
qualities and characteristics of various 
kinds of funeral merchandise; 

(3) sell, on a preneed basis, funeral 
services and merchandise; 

(4) record, on any form or otherwise, 
specific items of funeral services and 
merchandise selected on a preneed 
basis; 

(5) make funeral arrangements on a 
preneed basis; and 

(6) sign preneed contracts. 

No preneed funeral planning activities shall be 
engaged in by anyone other than a preneed sales 
lioenscc; licensee or a registered resident trainee in 
funeral directing or funeral service who is acting 
under the supervision of a preneed sales licensee 
as provided m 21 NCAC 34B .0103; provided, 
however, no resident trainee shall, as seller or 
seller's agent, sign a preneed funeral contract; and 
provided, however, provided further, no preneed 
sales license is required for solely the sale of an 
insurance policy, and in connection with such a 
sale, the salesperson shall not be deemed to have 



8:15 



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November 1, 1993 



1462 



PROPOSED RULES 



engaged in preneed funeral planning if, for the 
sole purpose of permitting a prospective purchaser 
to make an informed decision as to the amount of 
insurance desired, the salesperson shows only price 
lists of funeral services and merchandise. 

(c) A licensed funeral director or funeral service 
licensee wishing to apply for a preneed sales 
license shall submit to the Board the applicant's 
name, address, telephone number, funeral 
director's or funeral service license number, name 
and address of the preneed funeral establishment 
licensee or licensees on whose behalf the applicant 
will sell preneed funeral contracts, and the 
applicant's employment or agency relationship with 
the licensee or licensees. If the applicant proposes 
to sell on behalf of more than one preneed funeral 
establishment licensee, the applicant shall disclose 
information to satisfy the requirement of G.S. 
90-210. 67(a) that the preneed funeral establishment 
licensees be related by ownership or contract. 

(d) The Board shall issue to each preneed sales 
licensee a pocket card as certification of the 
preneed sales license. The preneed sales licensee 
shall carry the card while engaging in preneed 
funeral planning. The card shall indicate the 
names of the preneed funeral establishment 
licensees on whose behalf the preneed sales 
licensee is authorized to sell preneed funeral 
contracts, and if there is any change in the list of 
establishments on whose behalf the preneed sales 
licensee is authorized to sell, the preneed sales 
licensee shall make a new application for a 
preneed sales license and shall pay the application 
fee. 

(e) The preneed sales licensee shall sign and 
affix his or her preneed sales license number to 
each preneed funeral contract, which he or she 
sells, in the presence of the purchaser of the 
contract at the time of sale. 

Statutory Authority^ G.S. 90-210.25(a)(4); 90- 
210.67(a). (c): 90-210.69(a). 

Li otice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Board of 
Nursing intends to amend rules cited as 21 NCAC 
36 .0203. .0211. .0213. .0218 and .0221. 

1 he proposed effective date of this action is 
Februar\- 7, 1994. 



1 he public hearing will be conducted at 1:00 
p.m. on December 9, 1993 at the North Carolina 
Board of Nursing Office, 3724 National Drive, 
Suite 201. Raleigh, NC 27612. 

rveason for Proposed Action: 
21 NCAC 36 .0203 - To be consistent with the 
G.S 90-171.35 changes effective June 30, 1993. 
21 NCAC 36 .0211 - To be consistent with the 
G.S 90-1 71 -.30 changes effective June 30, 1993. 
21 NCAC 36 .0213 - To be consistent with the 
G.S 90-171.31 changes effective June 30, 1993. 
21 NCAC 36 .0218 - To be consistent with the 
G.S. 90-171.33 changes effective June 30, 1993. 
21 NCAC 36 .0221 - To permit legal practice of 
nursing for out-of-state students engaged in clinical 
experiences in North Carolina. 

i^omment Procedures: Any person wishing to 
present oral testimony relevant to proposed rules 
may register at the door before the hearing begins 
and present hearing officer with a \vritten copy of 
testimony. Written comments concerning these 
rules must be submitted by December 9, 1993, to 
Jean Stanley, CPS, A PA Coordinator, North 
Carolina Board of Nursing, P.O. Bo.x 2129, 
Raleigh. N.C., 27602-2129. 

CHAPTER 36 - BOARD 
OF NURSING 

SECTION .0200 - LICENSURE 

.0203 REINSTATEMENT OF LAPSED 
LICENSE 

(a) The registrant whose license has lapsed and 
who desires reinstatement of that license will: 

(1) furnish information required on forms 
provided by the Board; 

(2) provide a statement of the reason for 
failure to apply for renewal prior to the 
deadline; 

(3) submit evidence of unencumbered 
license in all jurisdictions in which a 
license is or has ever been held; 

(4) submit evidence of completion of all 
court conditions resulting from any 
misdemeanor or felony conviction(s); 

(5) submit such other evidence that the 
Board may require to determine wheth- 
er the license should be reinstated; and 

(6) submit payment of reinstatement and 
renewal fee. 



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PROPOSED RULES 



(b) The registrant whose license has lapsed for 
a period of five years or more will also submit: 

(1) evidence of mental and physical health 
necessary to competently practice nurs- 
ing; 

(2) evidence of satisfactory completion of a 
Board-approved refresher course or 
proof of active licensure within the past 
five years in another jurisdiction : and 

(3) a recent photograph for identification 
purposes, if deemed necessary. 

(c) If a refresher course is required, the regis- 
trant must apply for reinstatement of the license 
within one year of completing the refresher course 
in order to receive a current license. The applica- 
tion for reinstatement must include verification 
from the provider of the refresher course that the 
registrant has satisfactorily met both theory and 
clinical objectives and is deemed competent to 
practice nursing at the appropriate level of licen- 
sure. 

(d) The Board may decline to reinstate a license 
if it is not satisfied as to the applicant's ability to 
practice nursing, or it may issue a license for a 
restricted period of time. 

Statutory Authority G. S. 90-1 71.23(b); 90-1 71.35; 
90-171.37. 

.0211 EXAMINATION 

(a) An applicant meets the educational qualifica- 
tions to write the examination for licensure to 
practice as a registered nurse by: 

(1) graduating from a board approved 
nursing program designed to prepare a 
person for registered nurse licensure; 

(tM — applicants graduating before July 1 , 
1981 — have — no tim e — restrictions — »« 
writing the examination; 

(B^ — applicants — graduating after July — h 
1981 — must — write — the — examination 
within three years of graduation. 

(2) graduating from a nursing program 
outside the United States or Canada that 
is designed to prepar e provide gradu- 
ates for the equivalent of with compara- 
ble preparation for licensure as a regis- 
tered nurse, and submitting the certifi- 
cate issued by the Commission on 
Graduates of Foreign Nursing Schools 
as evidence of the required educational 
qualifications. 

(b) An applicant meets the educational qualifica- 
tions to write the examination for licensure to 
practice as a licensed practical nurse by: 



1981 — have no time — restrictions — ee 
writing the examination; and 



(1) graduating from a Board approved 
nursing program designed to prepare a 
person for practical nurse licensure; 

fA) — applicants graduating before July 1 , 

fB) — applicants graduating after July — 1-; 
V)%\ — HSttst — write — the — e xamination 
within three year s of graduation. 

(2) graduating from a nursing program 
outside the United States or Canada that 
is designed to prepare provide gradu- 
ates for the equivalent of with compara- 
ble preparation for licensure as a li- 
censed practical nurse, and submitting 
evidence from a Board approved evalu- 
ation agency of the required educational 
qualifications and evidence of English 
proficiency from a Board approved 
agency or service; 

(3) graduating within the past three years 
from a Board approved nursing pro- 
gram designed to prepare graduates for 
registered nurse licensure, and failing 
to pass the examination for registered 
nurse licensure; 

(4) graduating from a nursing program 
outside the United States and Canada 
that is designed to prepare graduates for 
registered nurse licensure, submitting 
evidence of English proficiency from a 
Board approved agency or service, and 
failing to pass the examination for 
registered nurse licensure in any juris- 
diction within the past three year s; or 

(5) completing a Board approved course of 
study such as ofl'ered by the U.S. Navy 
military service branches for Hospital 
Corpsman. Applicants must write the 
examination within three years of com 
plcting active duty/selected reserve duty 
as a military Hospital Corp s man. The 
Board approved course of study 
includes: 

(A) a course equivalent to the U.S. Navy 
Hospital Corpsman Basic (Class "A") 
course; 

(B) Advancement Examination for Navy 
Hospital Corpsman Third Class or an 
equivalent examination; 

(C) college level human lifespan growth 
and development course; and 

(D) a nursing course provided by the 
Navy or another approved agency that 
includes maternal-child nursing theory 



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November I, 1993 



1464 



PROPOSED RULES 



and clinical, the legal role of the 
LPN, the nursing process, and 
nutrition. 

(c) An application to the Board of Nursing for 
examination shall be submitted at least 60 days 
prior to the examination. Pursuant to The 
Americans with Disabilities Act and guidelines 
established by the National Council of State Boards 
of Nursing, Inc., the Board cannot accept 
applications received after the established deadline 
date. An admission card with specific information 
as to time, date, and place of examination will be 
mailed to the applicant approximately 14 days 
prior to the date of the examination. 

(d) The examinations for licensure developed by 
the National Council of State Boards of Nursing, 
Inc. shall be the examinations for licensure as a 
registered nurse or as a licensed practical nurse in 
North Carolina. 

(1) These examinations shall be 
administered in accordance with the 
contract between the Board of Nursing 
and the National Council of State 
Boards of Nursing, Inc. 

(2) The examination examinations for 
licensure as a registered nurse shall be 
administered in February and July on 
dates — determined — by — the — National 
Council of State Boards of Nursing, Inc 
at least twice a year. 

0) The — examination — fef — licen s ur e — as — a 

liocnsed — practical — nurse — shall — be 
administered in April and October on 
date s — determined — ^i' — the — National 
Council — of State Boards of Nursing, 
inc. 

(43) Scores on the examination shall be 
reported, by mail only, to the individual 
applicant and to the director of the 
program from which the applicant was 
graduated. Aggregate results from the 
examination(s) may be published by the 
Board. 

(54) The passing standard score for each of 
the five tests comprising the 
examination for registered nurse 
licensure, up to and including the 
February 1982 examination is was 350. 
For the examination offered in July 
1982 and through July 1988, the 
passing score is was 1600. Beginning 
February 1989, the pa ss ing — s cor e 
results for registered nurse licensure is 
reported as "PASS" or "FAIL" . 

(65) The passing score for the examination 



for practical nurse licensure, up to and 
including the April 1988 « was 350. 
Beginning October 1988, the passing 
s core results for practical nurse 
licensure is reported as "PASS" or 
"FAIL" . 

(e) Applicants who meet the qualifications for 
licensure will be issued a certificate of registration 
and a license to practice nursing for the remainder 
of the year. 

(f) Applicants for a North Carolina license may 
take the examination for licensure developed by 
the National Council of State Boards of Nursing, 
Inc. in another jurisdiction of the United States, 
providing: 

(1) the Board of Nursing in that jurisdiction 
consents to proctor the applicant; 

(2) arrangements are made through the 
North Carolina Board of Nursing 
sufficiently in advance of the 
examination date to meet application 
requirements in both jurisdictions; and 

(3) the applicant pays any service fee 
charged by the proctoring Board. 

(g) The North Carolina Board of Nursing may 
proctor an examination upon request of another 
state Board of Nursing at the regularly scheduled 
examination sessions if space is available. The 
applicant shall submit a service fee for such 
proctoring. 



Statutory Authority G.S. 
90-171.29; 90-171.30. 



90-171.23(15): 



.0213 REEXAMINATION 

(a) An applicant who fails an examination and is 
eligible to take a subsequent examination must 
submit a completed application and the current 
examination fee by the published deadline date for 
that examination session. That applicant is not 
considered a first-time writer of the examination. 

fb) — An applicant who was graduated after July 
1, 1981. and does not pass an examination within 
three years of graduation must after that three year 
period establish eligibility to tolcc an examination. 
Afi — applicant — establishes — this — eligibility — by 
s ucce ss fully completing a Board approved nursing 
program and by the applicant or the faculty of the 
program — submitting evidence of the applicant' s 
classroom and clinical competencies. — When an 
applicant — establishes — eligibility — te — take — an 
examination, the applicant may take s ub s equent 
examinations for a period of three years. — If the 
applicant does not pass within that three years, the 
applicant must again e s tablish eligibility. 



1465 



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PROPOSED RULES 



(e) A — Board approved — nursing progmm that 

establishes eligibility for an applicant to talcc an 
examination is one: 

ft) that is offered by or in conjunction with 

an exi s ting nursing program approved 
by the Board and has a curriculum 
de s igned — te — prepare — graduates — fer 
registered — nur s e — licensure, — practical 
nurse licensure, or both, as described in 
Rule .0309; 

{3) whose objectives and competencies are 

in accord with outcomes expected of an 
individual in nursing practice as legally 
defined — for the appropriate licensure 
level; and 

0) whose purposes, — policie s , — objectives, 

and competencies have been submitted 

to, and approved by, the Board prior to 

the enrollment of applicants. 

fd) — An applicant who establishes eligibility to 

talce an examination by successfully completing a 

Board approved nur s ing program i s eligible for a 

Status A temporary license. Eligibility for a Status 

A license is restricted to once ever^' three year s . 

{e) — An applicant who fails an examination and 
whose eligibility to take s ub s equent examination s 
ha s not expired may enroll with student status, as 

specified m SrS^ 90 171. 4 3(2), m a 

Board approved — nursing — program — designed — te 
enhance the acquisition and application of nursing 

knovt'ledge — and — skills. This — Board approved 

nur s ing program is one: 

f4-) offered by or in conjunction with an 

exi s ting nursing program approved to 
prepare individuals for licensure; and 

{3) whose purposes, objective s , 

competencies. and teaching and 

learning activitie s have been s ubmitted 
te^ — and — approved — by; — the — Board — te 

include — those — components legally 

defined for the licensure level, 
(f) Any program as defin e d in (c) and (e) of this 
Rule — mu s t — have — established — mechanisms — fef 
supervision of learning experiences, evaluation of 
program effeetiveness, and assurance of adequate 
resources to support the progmm objectives. 

Statutory Authority G.S. 90-171.31; 90-171.33: 
90-171.38. 

.0218 LICENSURE WITHOUT 
EXAMINATION (BY 
ENDORSEMENT) 

(a) The Board will provide an application form 
which the applicant who wishes to apply for 



licensure without examination (by endorsement) 
must complete in its entirety. 

(1) The applicant for licensure by 
endorsement as a registered nurse is 
required to show evidence of: 

(A) completion of a nursing program 
approved by the jurisdiction of 
original licensure; 

(B) attainment of a standard score equal 
to or exceeding 350 on each test in 
the State Board Test Pool 
Examination administered prior to 
July 1982; or a standard score of 
1600 on the licensing examination 
developed by the National Council of 
State Boards of Nursing, Inc. 
beginning in July 1982 and up to and 
including the July 1988 examination; 
or beginning in February 1989, a 
score result of "PASS". An exception 
to this requirement is made for the 
applicant who was registered in the 
original state prior to April 1964. 
Such applicant must have attained the 
score, on each test in the series, 
which was required by the state 
issuing the original certificate of 
registration; 

(C) mental and physical health necessary 
to competently practice nursing; 

(D) unencumbered license in all 
jurisdictions in which a license is or 
has ever been held; if the license in 
the other jurisdiction has been inactive 
or lapsed for five or more years, the 
applicant will be subject to 
requirements for a refresher course as 
indicated in G.S. 90-171.35 and 
90-171.36; and 

(E) completion of ail court conditions 
resulting from any misdemeanor or 
felony conviction(s). 

(2) The applicant for licensure by 
endorsement as a licensed practical 
nurse is required to show evidence of: 

(A) completion of: 

(i) a program in practical nursing 
approved by the jurisdiction of 
original licensure; or 

(ii) course(s) of study within an 
approved program(s) which is 
(are) comparable to that required 
of practical nurse graduates in 
North Carolina; or 

(iii) approved course of study for 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1466 



PROPOSED RULES 



military hospital corpsman which 

is (are) comparable to that 

required of practical nurse 

graduates in North Carolina. 

Tlie applicant who was graduated prior 

to July 1956 will be considered on an 

individual basis in light of licensure 

requirements in North Carolina at the 

time of original licensure; 

(B) achievement of a passing score on the 
State Board Test Pool Examination or 
the licensing examination developed 
by the National Council of State 
Boards of Nursing, Inc. If originally 
licensed on or after September 1 , 
1957, and up to and including the 
April 1988 examination, an applicant 
for a North Carolina license as a 
practical nurse on the basis of 
examination in another state must 
have attained a standard score equal 
to or exceeding 350 on the licensure 
examination. Beginning in October 
1988, an applicant must have received 
a score result of "PASS" on the 
licensure examination. The applicant 
who was licensed prior to September 
I, 1957 in the original jurisdiction 
will be con s id e red on an individual 
basis — m — light — ©f — tbe — licensure 
requirements in North Carolina at the 
time of original licensure must have 
attained the score which was required 
by the jurisdiction issuing the original 
certificate of registration ; 

(C) mental and physical health necessary 
to competently practice nursing; 

(D) unencumbered license in all 
jurisdictions in which a license is or 
has ever been held; if the license in 
the other jurisdiction has been inactive 
or lapsed for five or more years, the 
applicant will be subject to 
requirements for a refresher course as 
indicated in G.S. 90-171.35 and 
90-171.36; and 

(E) completion of all court conditions 
resulting from any misdemeanor or 
felony conviction(s). 

(b) The North Carolina Board of Nursing will 
require applicants for licensure by endorsement to 
provide proof of secondary education achievement 
only if deemed necessary for identification, or 
other just cause. 

(c) Graduates of Canadian nursing programs 



who have been licensed in Canada on the basis of 
the Canadian Nurses' Association Test Service 
Examination (CNATS) written in the English 
language are eligible to apply for registration by 
endorsement provided the applicant has not failed 
the examination developed by the National Council 
of State Boards of Nursing, Inc. in North 
Carolina. 

(d) A nurse educated and licensed outside the 
United States of America is eligible for North 
Carolina licensure by endorsement if the nurse 
has: 

(1) proof of education as required by the 
Board or a certificate issued by the 
Commission on Graduates of Foreign 
Nursing Schools; and 

(2) proof of passing the licensing 
examination developed by the National 
Council of State Boards of Nursing, 
Inc. in another jurisdiction. An 
exception to this requirement is made 
for the applicant who was registered by 
Canadian province examination written 
in the English language prior to 
CNATS or SBTPE, and has worked in 
nursing within the past five years or has 
completed a Board-approved refresher 
course. 

(e) When completed application, evidence of 
current license in another jurisdiction, and fee are 
received in the Board office, a temporary license 
is issued to the applicant. Employer references 
may be requested to validate competent behavior 
to practice nursing. 

(f) Facts provided by the applicant and the 
Board of Nursing of original licensure are 
compared to confirm the identity and validity of 
the applicant's credentials. Status in other states 
of current licensure is verified. When eligibility is 
determined, a certificate of registration and a 
current license for the remainder of the calendar 
year are issued. 

Statutory' Authority G.S. 90-171. 23(b); 90-171.33; 
90-171.37. 

.0221 LICENSE REQUIRED 

(a) No cap, pin, uniform, insignia or title shall 
be used to represent to the public that an 
unlicensed person is a registered nurse or a 
licensed practical nurse. 

(b) A license to practice nursing is not required 
for the repetitive performance of a common task or 
procedure which does not require the professional 
judgment of a registered nurse or licensed practical 



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PROPOSED RULES 



nurse, and which Tasks may be delegated to an 
unlicensed person which : 

f4^ is delegated by a licen s ed physician, 

licensed dentist or licensed nurse; 

(31) frequently r e cur s recur in the daily care 
of a client or group of clients; 

(32) is are performed according to an 
established sequence of steps; 

(43) involves involve little or no 
modification from one client-care 
situation to another; 
(§4) may be performed with a predictable 

outcome; and 
(65) dees do not inherently involve ongoing 
assessments assessment , interpretation s 
interpretation , or decision-making 
which cannot be logically separated 
from the procedure procedure(s) itself. 
Client-care services which do not meet all of these 
criteria must be performed by a duly licensed 
nurse. The restrictions, however, do not apply to 
care performed by clients themselves, their 
families or significant others, or by caretakers who 
provide personal care to individuals whose health 
care needs are incidental to the personal care 
required. 

(c) A license to practice nursing is required for 
implementing any treatment and pharmaceutical 
regimen which is likely to produce side or toxic 
eff"ects, allergic reactions, or other unusual effects 
or which may rapidly endanger a client's life or 
well-being and which is prescribed by a person 
authorized by state law to prescribe such a 
regimen. 

(1) The nurse who assumes responsibility 
for implementing a treatment and 
pharmaceutical regimen is accountable 
for: 

(A) recognizing side effects; 

(B) recognizing toxic effects; 

(C) recognizing allergic reactions; 

(D) recognizing immediate desired effects; 

(E) recognizing unusual and unexpected 
effects ; 



(F) recognizing 
condition 
continued 
medication; 

(G) anticipating 
rapidly endanger a 
well-being; and 

(H) making judgments and decisions 
concerning actions to take in the event 
such untoward effects occur. 
(2) Exceptions to .0221(c)(1) are: 



changes in client's 

that contraindicates 

administration of the 

those effects which may 
client's life or 



(A) persons who hold statutory authority 
to administer medications; 

(B) clients themselves, their families or 
significant others, or caretakers who 
provide personal care to individuals 
whose health care needs are incidental 
to the personal care required; 

(C) administration of oral nutritional 
supplements; 

(D) applications of non-systemic, topical 
skin preparations which have local 
effects only provided that ongoing, 
periodic assessment of any skin lesion 
present is carried out by a person 
licensed to make such assessments; 
and 

(E) administration of commonly used 
cleansing enema solutions or 
suppositories with local effects only. 

(d) Unlicensed nursing students enrolled m 
out-of-state nursing education programs who are 
requesting utilization of North Carolina clinical 
facilities, shall be allowed such experiences 
following approval by the Board of Nursing or its 
designee. Upon receiving such a request, the chief 
nurse administrator of a North 
Carolina clinical facility contacted by an 
out-of-state nursing education program seeking 
nursing student clinical education experiences in 
North Carolina shall provide the Board with the 
following at least 60 days prior to the start of the 
requested experience prior to receiving approval 
for accepting the students: 

(1) letter of request for approval to provide 
the clinical offering; 

(2) course description 

course objectives, 

grading criteria for the 



which includes 



content 



outline, 
course, and 
curriculum pattern which lists all 
courses required and placement of this 
course in the curriculum; 

(3) names of faculty members responsible 
for coordinating the student's 
experiences; 

(4) documentation that the nursing program 
is currently approved by the Board of 
Nursing or other appropriate approval 
bodies in the state in which the parent 
institution is located; 

(5) proposed starting and completion dates 
for the requested clinical experiences; 

(6) criteria used for selection of the 
students for the clinical experience fn 
North Carolina; 

(7) number of students to be placed hi the 



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November 1, 1993 



1468 



PROPOSED RULES 



ilM 



12) 



facility; 

(8) units for placement and number of 
students on each unit; 

(9) RN faculty or preceptor qualification 
criteria with vitae. including NC RN 
license numbers of those working with 
the students; 

(10) signed contract between nursing pro- 
gram and clinical facility indicating 
ratio will not be greater than 1:10 
faculty to student ratio for groups of 
students or \\2 preceptor to student ]f 
preceptor arrangement Is proposed; 
written statement from chief nursing 
administrator indicating the proposed 
clinical experience does not conflict 
with clinical unit commitment to ap- 
proved North Carolina nursing pro- 
grams who have contracts with the 
facility; 

evidence that all students involved in 
the proposed clinical experience are in 
good academic standing; and 
plans that ensure timely communica- 
tions between the coordinating faculty 
from out-of-state program, the partici- 
pating NC nurses, the chief nursing 
administrator of the NC clinical facility 
and the students. 

(e) If the approved experience is to continue on 
an annual basis, written notification shall be 
submitted annually, by the chief nurse administra- 
tor of the NC facility at least thirty days prior to 
the resumption of the experiences. This notice 
shall include notification of any changes in the 
information submitted in material required in 
Paragraph (d) of this Rule. Upon review by the 
Board or its designee, written approval shall be 
sent to the Chief Nurse administrator of the NC 
facility and the out-of-state nursing program, 
within thirty business days of receipt of the materi- 
als in the Board oflice. Copies of the following 
shall be distributed by the chief nursing adminis- 
trator of the clinical facility to all students and 
faculty involved in the clinical experiences: 

(1) North Carolina Nursing Practice Act; 
North Carolina administrative rules and 



13) 



01 

ID 
i4] 



related interpretations regarding the role 
of the RN, LPN. and unlicensed nurs- 
ing personnel; 

North Carolina Board developed Guide- 
lines for Utilization of Preceptors; and 
North Carolina Board of Nursing devel- 
oped Interpretations According to 
Adopted Categories. 



(f) Failure to comply with the requirements in 
Paragraph (d) of this Rule as established by the 
North Carolina Board of Nursing shall result in the 
immediate withdrawal of the Board's approval of 
the clinical oflFerings. 

Statutory Authority G.S. 90-171 .23(b): 90-171.39; 
90-171.43. 

iS otice is hereby given in accordance with G.S. 
150B-21.2 that the North Carolina Board of 
Occupational Therapy intends to adopt rules cited 
as 21 NCAC38 .0701 - .0706; amend rules .0102, 
.0204, .0613; repeal rules .0306 and .0307 . 

1 he proposed effective date of this action is 
February 1 , 1994. 

Instructions on How to Denmnd a Public Hearing 
(must be requested in writing within 15 days of 
notice): Requests for a Public Hearing must be 
submitted in writing by November 15, 1993 to: 
Charles P Wilkins, Legal Counsel to the NCBOT, 
PO. Box 2280. Raleigh, NC. 27602. 

MXeason for Proposed Action: 
21 NCAC 38 .0701 - .0706 - to reflect an amend- 
ment to G.S. 55B-2(6) which allows occupational 
therapists to enter into professional corporations. 
21 NCAC 38 .0102 - to reflect the relocation of 
the administrative offices of the Board. 
21 NCAC 38 .0204 - to increase the late renewal 
fee from twenty-five dollars ($25.00) to fifth dol- 
lars ($50.00). 

21 NCAC 38 .0613 - to clarify the procedure for 
judicial rex'iew of a final agency decision. 
21 NCAC 38 .0306 and .0307 - repeal rules due 
to an amendment to G.S. 55B-2(6) which allows 
occupational therapists to enter into professional 
corporations. 

K^onmwnt Procedures: Comments concerning 
these rules mast be submitted in writing by Decem- 
ber 1, 1993 to: Charles P Wilkins, Legal Counsel 
to the NCBOT. PO. Box 2280, Raleigh. NC. 
27602. 

CHAPTER 38 - BOARD OF 
OCCUPATIONAL THERAPISTS 



1469 



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PROPOSED RULES 



SECTION ,0100 - ORGANIZATION 
AND GENERAL PROVISIONS 

.0102 BOARD OFFICE 

The administrative offices of the North Carolina 

Board of Occupational Therapy are located at: 

Suite 1921. Center Plaza Building 

4 1 1 Fayettcvillc Street Mall 

Suite 2220. First Union Capitol Center 

150 Fayetteville Street Mall 

P.O. Box 2280 

Raleigh, North Carolina 27602 

Telephone: (919)832-1380 

Office hours are 9:00 a.m. until 5:00 p.m., 
Monday through Friday, except holidays. 

Statutory Authority^ G.S. 90-270.68. 

SECTION .0200 - APPLICATION 
FOR LICENSE 

.0204 FEES 

(a) Fees are as follows: 

(1) a request for an initial application for 
licensure as an occupational therapist, 
an occupational therapist assistant, or a 
provisional licensee is ten dollars 
($10.00); 

(2) consideration of the application for 
issuance of a license or re-issuance of 
an expired license is one hundred 
dollars ($100.00); 

(3) annual renewal of a license is fifty 
dollars ($50.00); 

(4) late renewal of a license is an additional 
twenty five — dollar s — ($25.00); fifty 
dollars ($50.00); 

(5) issuance of a provisional license is 
thirty-five dollars ($35.00). 

(b) Fees shall be nonrefundable and shall be 
paid in the form of a cashier's check, certified 
check or money order made payable to the North 
Carolina Board of Occupational Therapy. 
However, personal checks may be accepted for 
payment of renewal fees. 

Statutory Authority G.S. 90-270.77. 

SECTION .0300 - LICENSING 

.0306 PROFESSIONAL CORPORATION 

Occupational thcrapista may not incorporate under 
the Profes s ional Corporation Act, G.S. 55B . 



Statutory Authority G. S. 55B-2. 

.0307 RENEWAL OF CERTIFICATE 
OF REGISTRATION 

Occupational therapi s ts arc not required to obtain 
or renew a Certificate of Registration under the 
Profe ss ional Corporation Act, G.S. 55B. 

Statutory Authority G. S. 55B-2. 

SECTION .0600 - ADMINISTRATIVE 
HEARING PROCEDURES 

.0613 FINAL DECISION 

In all cases heard by the Board, the Board will 
issue its decision within 60 days after its next 
regularly scheduled meeting following the close of 
the hearing. The decision will be the prerequisite 
"final agency decision" for the right to judicial 
review. To obtain judicial review, the person 
seeking review must file a petition with the court 
in accordance with the provisions of G.S. 150B- 
45, 

Statutory Authority G. S. 150B-45. 

SECTION .0700 - PROFESSIONAL 
CORPORATIONS 

.0701 AUTHORITY' AND DEFD^TIONS 

(a) Under the Professional Corporation Act, 
G.S. 55 B. the North Carolina Board of Occupa- 
tional Therapy has the authority to regulate profes- 
sional corporations whose purpose is the provision 
of occupational therapy related services. 

(b) The rules in this Section supplement the 
basic statutory governing professional corporations 
and shall be interpreted so as not to conflict with 
such statutory law, as it may be amended from 
time to time, or with other statutes and laws 
governing corporations generally. 

(c) "Board" means the North Carolina Board of 
Occupational Therapy. 

(d) "Occupational therapy related services" 
means those activities through which occupational 
therapy, as defined in OS, 90-270.67(4). is 
practiced. 

(e) "Licensee" means any individual who is duly 
licensed to practice occupational therapy in North 
Carolina as a registered occupational therapist. 

(f) "Professional Corporation" means profession- 
al corporations organized for the purpose of 
providing occupational therapy related services in 
North Carolina. 

(g) "Legal Counsel" means the legal counsel to 



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1470 



PROPOSED RULES 



the North Carolina Board of Occupational Thera- 

(h) "Assistant" means the administrative 
assistant to the North Carolina Board of 
Occupational Therapy. 

Statutory Authority G.S. 558-2; 55B-12; 90- 
170.67. 

.0702 PREREQUISITES FOR 
INCORPORATION 

The following requirements must be met jn order 
to incorporate: 

(1) The incorporator, whether one or more, 
of a professional corporation shall be 
duly licensed to practice occupational 
therapy in North Carolina as a registered 
occupational therapist. 
Before the filing of the articles of incor- 
poration with the Secretary of State, the 
incorporators shall file with the assistant 
to the Board a copy of the original arti- 
cles of incorporation, together with a 
registration fee of fifty dollars ($50.00). 
The copy of the articles of incorporation 
shall be accompanied by an application to 
the Board (Corp. Form 01) certified by 
all incorporators, setting forth the names , 
addresses and N.C. license numbers of 
each shareholder of said corporation who 
will be practicing occupational therapy 
for said corporation. 
Included with the above shall be a state- 



m 



13} 



14} 



15} 



ment that all such persons are duly li^ 
censed to practice occupational therapy in 
North Carolina as registered occupational 
therapists, and stating that the corporation 
will be conducted in compliance with the 
Professional Corporation Act and these 
Regulations. 

If the articles are changed in any manner 
before being filed with the Secretary of 
State, they shall be re-submitted to the 
assistant to the Board and shall not be 
filed until approved by the assistant to the 
Board. 



Statutory Authority G.S 55B-4: G.S 55B-10; 90- 

170.67(5). 

.0703 CERTIFICATE OF REGISTRATION 

The Certificate of Registration shall be issued as 
follows: 

The legal counsel or assistant shall issue 



ill 



a Certificate of Registration (Corp. Form 



02) for the professional corporation to 
become effective only when the profes- 
sional corporation files the articles of 
incorporation with the Secretary of State 
and ifi 

(a) the legal counsel or assistant to the 
Board finds that no disciplinary action 
is pending before the Board against any 
of the licensed incorporators or persons 
who will be directors, officers, or 
shareholders of such corporation; and 

(b) it appears to the legal counsel or assis- 
tant that such corporation will be con- 
ducted in compliance with the law and 
regulations. 

(2) The proposed original articles of incorpo- 
ration, and the Certificate of Registra- 
tion, will be returned to the incorporators 
for filing with the Secretary of State. 
The copy of the articles and a copy of the 
certification will be retained in the ad- 
ministrative offices of the Board. If the 
required findings cannot be made, the 
registration fee shall be refunded to the 
incorporators. 

(3) The initial Certificate of Registration 
shall remain m effect until June 30 of the 
year in which it was issued unless sus- 
pended or terminated as provided by law. 
TTie Certificate of Registration shall be 
renewed annually thereafter. 

(4) At least 20 days prior to the date of 
expiration of the certificate, the corpora- 
tion shall submit its written application 
for renewal upon a form as provided by 
the Board (Corp. Form 03). said applica- 
tion to be accompanied by check in the 
amount of twenty-five dollars ($25.00) in 
payment of the renewal fee. The Board 
shall renew the certificate provided that 
the Board finds that the corporation has 
followed the law and the regulations of 
the Board. 

(5) If the corporation does not apply for 
renewal of its Certificate of Registration 
within 30 days after the date of its expi- 
ration, the Certificate of Registration 
shall be automatically suspended. Upon 
suspension of the Certificate of Registra- 
tion, the legal counsel or the assistant to 
the Board will notify the Secretary of 
State in writing. 

(6) The Certificate of Registration may be 
reinstated within the calendar year upon 
payment of the renewal fee plus a penalty 



1471 



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PROPOSED RULES 



I 



of ten dollars ($10.00), if such 
corporation is then otherwise qualified 
and entitled to a renewal of its Certificate 
of Registration. 

Statutory Authority G.S. 55b-12; 90-170.67(5). 

.0704 GENERAL AND ADMINISTRATIVE 
PROVISIONS 

The following general provisions shall apply to 
all incorporating professional associations: 
(1) If the legal counsel or assistant should 
decline to issue a Certificate of 
Registration required by 21 NCAC 38 
.0703(1), or decline to renew the same 
when properly requested, or shall refuse 
to take any other action required of 
him/her in writing by a professional 
corporation, the aggrieved party may 
request, in writing, a review of such 
action by the Board, and the Board shall 
provide a formal hearing for such 
aggrieved party before a majority of the 
Board. 

charters 



12] 



All amendments 



to 



of 



^ 



(3) 



\ 



professional corporations, all merger and 
consolidation agreements to which a 
professional corporation is a party, and 
all dissolution proceedings and similar 
changes in the corporate structure of a 
professional corporation shall be filed 
with the legal counsel or assistant to the 
Board for approval before being filed 
with the Secretary of State. 
The legal counsel or assistant is autho- 
rized to issue the certificate (Corp. Form 
04) required by G.S. 55B-6 when stock is 
transferred in a professional corporation, 
and such certificate shall be permanently 
attached to the stub of the transferee's 
certificate in the stock book of the profes- 
sional corporation. 



Statutory Authority G.S. 55B-6; 90.170.67(5). 

.0705 FORMS 

The following forms may be secured from the 
office of the Board regarding professional corpora- 
tions: 

(1) Regulations adopted by the Board relating 
to Professional Corporations whose pur- 
pose is providing occupational therapy 
related services; 

(2) Corp. Form 01 - Certificate of Incorpora- 
tor(s) and Application for a Certificate of 



13} 

141 
15} 



Registration for a Professional Corpora- 
tion; 
Corp. Form 02 ; Certificate of Registra- 



tion of a Professional Corporation for the 
Purpose of Providing Occupational Ther- 
apy Related Services; 
Corp. Form 03 ^ Application for Renewal 
of Certificate of Registration; and 
Corp. Form 04 z Certificate Authorizing 
Transfer of Stock in Professional Corpo- 
ration Organized to Provide Occupational 
Therapy Related Services. 



Statutory Authority G.S 55B-12; 90-170.67(5). 

.0706 FEES 

(a) Initial issuance of a Certificate of Registra- 
tion requires a fee of fifty dollars ($50.00). 

(b) Renewal of a Certificate of Registration 
requires a fee of twenty-five dollars ($25. (X)). 

(c) Late renewal of a Certificate of Registration 
requires an additional fee often dollars ($10.00). 

Statutory Authority G.S 55B-10; 553-11; 55B-12. 

TITLE 25 - OFFICE OF 
STATE PERSONNEL 

iSotice is hereby given in accordance with G.S. 
150B-21.2 that the Office of State Personnel/State 
Personnel Commission intends to amend rules cited 
as 25 NCAC ID .0205, .0211. .0212, .0401, 
.0403. .0405, .0504, .0510, .0512, .0611, .1928; 
IH .0624, .0625, .0628; IJ .0602, .0604, .0608. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 9:00 
a.m. on December 8, 1993 at the Personnel 
Development Center, 101 Peace Street, Raleigh, 
North Carolina. 

MVeason for Proposed Action: 
25 NCAC ID .0205, .0211, .0212, .0401, .0403, 
.0405, .0504, .0510, .0512, .0611, .1928- Clari- 
fies the definition of "demotion/ reassignment", 
changes "permanent" to "career" employee and 
G.S. 126-39 to G.S. 126-1 A to conform to the 
changes in Senate Bill 122. 

25 NCAC IH .0624. .0625. .0628 - Change 
"permanent" to "career" and G.S. 126-39 to G.S. 



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1472 



PROPOSED RULES 



126-lA to conform to the changes in Senate Bill 

122. 

25 NCAC IJ .0603, .0604. .0608 - To conform to 

Senate Bill 122 which re-defines permanent state 

employee to career state employee. 

l^omtnent Procedures: Interested persons may 
present statements either orally or in writing at the 
public hearing or in writing prior to the hearing by 
mail addressed to: Barbara A. Coward, Office of 
State Personnel. 116 W. Jones Street, Raleigh, NC 
27603. 

CHAPTER 1 - OFFICE OF STATE 
PERSONNEL 

SUBCHAPTER ID - COMPENSATION 

SECTION .0200 - NEW APPOINTMENTS 

.0205 EFFECTIVE DATE 

(a) A new employee may begin work on any 
scheduled workday in a pay period. When the first 
day of a pay period falls on a non-workday and the 
employee begins work on the first workday of a 
pay period, the date to begin work will be shown 
as the first of the pay period. 

(b) The effective date for change to permanent 
status shall be the date that it is determined that 
the employee meets acceptable performance stan- 
dards, but not less than three months from the date 
of employment. 

Statutory Authority G.S. 126-4. 

.0211 SALARY RATE 

(a) The hiring rate of pay for a class, or trainee 
rate where applicable, shall normally be paid a 
qualified new employee. When a special entry 
rate has been authorized, that rate may be paid a 
qualified new employee if the agency has made a 
decision to use the new rate. 

(b) It is intended that ag e nci e s mak e a s f e w 
appointm e nts abov e the hiring rat e (or applicabl e 
special e ntry rat e ) a s po ss ibl e . — Rates A salary 
above this the hiring rate (or applicable special 
entry' rate) may be requested on the initial appoint- 
ment or at the time the appointment is made 
permanent, but not to exceed the maximum salary 
published in the vacancy announcement, when: 

(1) extensive recruitment efforts have not 
produced qualified applicants; or 

(2) the applicant possesses exceptional 
qualifications above the hiring require- 



ments of the class specification, and 
operational needs exist which justify 
filling the position at the salary above 
the minimum of the range. The addi- 
tional experience and training must be 
in the same or closely related area to 
that stated as acceptable in the class 
specification. Generally, up to five 
percent above the minimum rate may be 
considered for each qualifying year of 
directly related experience and/or edu- 
cation above the minimum requirements 
not to exceed the midpoint of the range 
without — prior — approval — of the — State 
Personnel Director . 

(c) Appointments above the hiring rate are to be 
avoided if salary inequities would be created. This 
should be considered very carefully in order to 
avoid present or future inequities. One con s ider 
ation must be the policy which would apply if a 
current employee were promoted to a vacancy. — A 
s erious inequity can occur if a new employee is 
paid at a rate higher than that which would be paid 
if a current employee were promoted to the same 
position. 

(d) When an employee is given a permanent 
appointment status after successful completion of 
either the probationary period or the trainee 
period, if the initial salary is at the hiring rate or 
trainee rate, the employee's salary it shall be 
increased to the minimum rate of the range (unle ss 
appointment wa s made at or above thi s level) and 
may be increased to a higher rate if conditions 
justify . The efFectivc date for change to perma 
ncnt status must be the first day of a pay period. 
If the employee — m — in pay statu s for at lea s t 
one half of the workdays and holidays in the pay 
period, credit will be given for the full pay period. 

(e) If the employee salary is hired initially at an 
authorized special entry rate, the employee's s alary' 
it may be increased by five percent above the 
special entry rate upon successful completion of 
the probationary' period . 

(f) If the employee is hired at a salary below an 
authorized special entry rate because the lower 
salary is sufficient to attract applicants but not 
sufficient to retain the employee once experience 
is gained, an adjustment up to the special entry 
rate may be made during or at the end of the 
probationary period or at such time as performance 
indicates that it is justified. 

(g) If the initial salary js above the hiring rate, 
the agency may elect to increase the salai-y by 5% 
or to a higher rate if conditions justify. 

(h) Only with the prior approval of the State 



1473 



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November 1, 1993 



PROPOSED RULES 



Personnel Director and in well-documented cases 
which involve circumstances such as severe labor 
market conditions or extraordinary qualifications 
will salaries be considered which exceed the limits 
of this Section. 

Statutory Authority G.S. 126-4(2). 

.0212 JUSTIFICATION 

fa) If the salary requested is above the hiring 
rate or if it is anticipated that the salary will be 
increased to a rate above the minimum upon 
permanent appointment, the Forms PD-105 
requesting appointmcnta at rates above the hiring 
fate must include a statement of reasons and 
justification for s uch rates the rate that will be 
paid . 

{b) — If conditions justif^' appointment above the 
hiring rate, the agency may elect to use the hiring 
rate for initial appointment with the option to 
increase the salary to a rate above the hiring rate 
upon successful completion of the probationary 
period. 

Statutory Authority G. S. 126-4. 

SECTION .0400 - DEMOTION 

.0401 DEFINITION AND POLICY 

Demotion or reassignment is a change in status 
downward resulting from assignment to a position 
of lower ievei salary grade . It may result from the 
choice of the employee, inefficiency in 
performance or better utilization of individual 
ability. 

Statutory Authority G.S. 126-4. 

.0403 EFFECTIVE DATE 

Demotions or reassignments shall be made 
effective on the first day of the pay period. 

Statutory Authority G.S. 126-4. 

.0405 QUALIFICATIONS 

If a demotion or reassignment is made to a 
position within the same field of work, the 
employee automatically qualifies. However, if a 
demotion is made to a different field of work, the 
employee must meet the minimum education and 
experience requirements, or their equivalent, as set 
forth in the class specification. 

Statutory Authority G.S. 126-4. 



SECTION .0500 - SEPARATION 

.0504 REDUCTION IN FORCE 

(a) Policy. An appointing authority may 
separate an employee whenever it is necessary due 
to shortage of funds or work, abolishment of a 
position or other material change in duties or 
organization. Retention of employees in classes 
affected shall be based on systematic consideration 
of all the following factors: type of appointment, 
relative efficiency, actual and/or potential adverse 
impact on protected group individuals and length 
of service. However, neither temporary, 
probationary nor trainee employees in their initial 
six months of training shall be retained in classes 
where permanent employees (those who have 
satisfactorily completed a probationary or 
equivalent trial period) must be separated in the 
same or related class. 

(b) Agency Responsibility. 

(1) Each agency shall develop written 
guidelines for reduction-in-force which 
meet its particular needs and provide 
assurance to employees that potential 
reductions shall be considered on a fair 
and systematic basis. The guidelines of 
each agency shall be filed with the 
Office of State Personnel as a public 
record. 

(2) It is the employing agency's 
responsibility to inform the employee of 
separation as soon as possible and to 
inform the employee of the priority 
reemployment consideration available. 
The agency must provide employees 
with a minimum of two weeks notice of 
separation. For persons desiring 
priority consideration, the releasing 
agency must submit an application to 
the Office of State Personnel requesting 
priority consideration. If the employee 
does not want assistance in finding 
another state job, the agency should get 
a written statement to this effect and 
share a copy with the Office of State 
Personnel. 

(c) Appeals. A permanent career employee or 
an employee with permanent career status under 
competitive service who is separated due to 
reduction-in-fbrce shall have the right to appeal to 
the State Personnel Commission for a review to 
assure that systematic procedures were applied. 
The term " permanent career employee" shall mean 
a state employee person who: i s in a pay grade 60 
or lower position and primary position who has 



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November 1, 1993 



1474 



PROPOSED RULES 



been continuously employed by the State for the 
immediate 12 preceding months; « in a pay grade 
61 to pay grade 65 position and secondary level or 
professional position who has been continuously 
employed by the state for the immediate 56 24 
preceding months; is in a pay grade 66 to 70 
position — and management level or consultant 
position who has been continuously employed by 
the state for the immediate 48 36 preceding 
months; is in a pay grade 71 or higher position 
and has been continuously employed by the s tate 
for the immediate 60 preceding month s at the time 
of the act, grievance or employment practice 
complained of. Provisions of the appeal procedure 
shall be followed. 

(d) Affirmative Action. In accordance with 
federal guidelines affecting equal employment 
opportunity and affirmative action, any application 
of the reduction-in-fbrce policy must be analyzed 
to determine its impact in this area. 

(e) Leave 

(1) Vacation Leave. Employees are paid in 
a lump sum for accumulated vacation 
leave. 

(2) Sick Leave. Employees separated due 
to a reduction in force should be 
informed that their sick leave shall be 
reinstated if employed in any agency 
within three five years. 

Statutory Authorin- G.S. 126-1 A: 126-4(2). 

.0510 PRIORITi' REEMPLOITVIENT 
CONSIDERATION 

(a) Priority reemployment consideration shall be 
provided to: 

(1) Employees who have met the minimum 
service requirements of G.S. 
126 5(c)(r) 126-lA , and who occupy or 
accept and are subsequently separated, 
for reasons other than just cause, from 
positions designated exempt as 
confidential or policy-making pursuant 
to G.S. 126-5(c)(2) and G.S. 
126-5{d)(l). 

(2) Employees with permanent 
appointments. employees and 
apprentices with trainee appointments 
who have completed si.x months of 
service, and employees who attained 
permanent status prior to entering a 
trainee appointment, who have received 
notification of imminent separation due 
to shortage of funds or work, 
abolishment of a position or other 



material changes in duties or 
organization by the process commonly 
known as reduction-in-force. An 
employee who is separated at the end of 
a time-limited appointment is not 
eligible for priority consideration. 

(b) Employees separated from policy-making/ 
confidential exempt positions for reasons other 
than cause and employees with priority status due 
to reduction in force have equal priority. 

(c) The intent of priority consideration for 
employees separated from exempt positions is to 
enable a return to the career service at a salary 
grade equal to that held in the most recent subject 
position. For employees receiving notification of 
separation through reduction in force, the intent is 
to continue or restore employment at a salary 
grade equal to that held at the time of notification. 
In either instance, the salary grade and not the 
salary rate is the controlling factor. 

(d) A person with priority status who has reason 
to believe priority consideration was denied in a 
selection decision may appeal directly to the State 
Personnel Commission through the established 
contested hearing process. 

Statutory- Authority G.S 126-1 A; 126-5(c)(l); 
126-5(c)(2); 126-5(d)(l). 

.0512 POLICi-MAKING/CONFIDENTIAL 
EXEMPT PRIORITY 
CONSIDERATION 

(a) Employees removed from policy-making/ 
confidential exempt positions, for reasons other 
than cause, shall receive priority reemployment 
consideration as follows: 

(1) An eligible employee with 10 or more 
years cumulative service in subject 
positions, including the immediately 
preceding 12 months prior to placement 
in an exempt position, shall be 
reassigned to a subject position within 
the same department or agency, or if 
necessary within another agency, at the 
same salary grade and at a salary rate 
which bears a relationship with the 
midpoint of the salary range 
comparable to that of his most recent 
subject position. The reassignment 
must be within a 35 mile radius of the 
exempt position from which separated. 
If an employee is ofl'ered a 
reassignment which meets these criteria 
and refuses to accept, the priority is 
terminated. 



1475 



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PROPOSED RULES 



(2) An eligible employee who has the 
minimum service requirements for 
permanent career status (G.S. 126-1 A) 
but less than 10 years cumulative 
service in subject positions prior to 
placement in an exempt position, shall 
be permitted a one-time reemployment 
priority, to be exercised by the 
employee within one year following the 
effective date of his separation. Upon 
notice to the agency that priority is 
being requested, the employee shall be 
offered any available, non-exempt 
position for which he has formally 
applied and is qualified for, when the 
position applied for is equal to or below 
the salary grade of the most recent 
subject position held prior to 
separation; provided, however, that a 
prior offer may be made to a person 
qualified under Section 1 above, or to 
an employee from the same agency in 
which the vacancy occurs with priority 
status due to reduction in force. If 
there is not a priority applicant from 
the same agency in the applicant pool, 
an offer can be made to a current state 
employee with greater cumulative state 
service. 

(b) As exercised by the employee, this priority 
consideration shall expire when a formal offer is 
extended for employment in the position being 
applied for. A vacant position will not be 
considered available, for purposes of this policy, 
if an "understudy" has been groomed by the 
agency to fill it, under a pre-existing, formally 
understood, written arrangement, within a 
structured plan of development. 

(c) If an eligible policy-making exempt 
employee applies for and accepts a position 
through the regular, non priority selection process, 
which is at a salary grade below that held in his 
most recent subject position, that person shall 
retain the one-time priority for higher level 
positions for the remainder of the twelve month 
period. 

(d) If an eligible person accepts employment 
outside State Government, the one-time priority 
shall be continued through the one-year maximum 
at the person's request. 

Statutory Authority G.S. 126-1 A: 126-5. 

SECTION .0600 - REALLOCATION 



(1) 
(2) 



.0611 REALLOCATION/SALARY RATE 

(a) When an employee's position is assigned to 
a higher grade as a result of reallocation, subject 
to the availability of funds and satisfactory 
employee performance, salary increases, not to 
exceed the maximum of the range, may be given 
in accordance with the following: 

Salaries at the hiring rate shall be 
increased to the new hiring rate. 
Salaries at the minimum rate shall be 
increased to the minimum rate of the 
new range, and may be increased 
further in accordance with Paragraph 
(3) of this Rule. 

If it is determined that a salary increase 
is justified, with the exception of 
Paragraph (b) of this Rule, the salary 
shall be established as follows: Salaries 
within the range may remain the same; 
or if funds arc available and where 
appropriate, individual salary increases 
may be con s idered, but not to exceed 
#ve — percent — fef — eaeh — salary — grade 
provided by the reallocation. 
in accordance with the rules for New 



(3) 



lAl 



Appointments 
.0200). or 



(See 25 NCAC ID 



(B) up to five percent for each grade 
provided by the reallocation, if 
reallocated to a position within the 
same classification series or 



occupational group. 
The amount of increase shall 
determined consistent with 
employee's related training 
experience and the nature 



be 
the 
and 
and 

magnitude of the change in jobs, and 

take into consideration prior 

performance increases, work unit 

equity, and any other salary related 

considerations. When establishing 

salaries in accordance with the New 

Appointment Rules (See 25 NCAC ID 

.0200), the personnel action forms must 

include the justification for the salary 

decision. 

(b) However, — if If an employee has been 

reduced to a lower salary grade through demotion, 

reassignment, reallocation or salary range revision, 

but without a corresponding reduction in salary, 

and within 12 months of the reduction the 

employee is reallocated: 

(1) The employee shall not be entitled to a 
reallocation increase unless the 
reallocation js to a grade higher than 



8:15 



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November 1, 1993 



1476 



I i| i|||y ir i ' illJ fl |U"«i«u"j»«utiijju.ujjMa«i^ 



PROPOSED RULES 



the grade held prior to the reduction. 

(2) If reallocated to a higher grade, the 

number of grades in the original 

reduction shall be considered to have 

been compensated and shall not be 

considered in setting the salary pursuant 

to ^rt (a)(3)(B) of this Rule. 

and the employee's position ia later assigned to a 

higher grade as a result of reallocation, the number 

of grade s — ifl — the — original — reduction — shall — be 

considered to have been compensated and s hall not 

be considered in Paragraph (a) of this Rule salary 

setting procedure. (Example: If an employee is 

demoted with no change in salary and reallocated 

back to the same level, the salary shall remain 

unchanged and treated as if the demotion had not 

occurred; or if reallocated back to a level higher 

than before the demotion, the difference in the 

grade before the demotion and the new higher 

grade will be the basis for determining the 

reallocation increase.) Agency management is 

responsible for assuring that inequities are not 

created. 

(c) If the reduction in grade occurred as much as 
34 — months — previou s ly. — th« — agency — me^ — gwe 
considemtion to granting a s alary increase within 

the — provisions of this — policy. Factors to — be 

considered are the nature of the change in duties 
and responsibilities and the need to maintain equity 
of salaries within the work unit. 

(c) fd) Only with the prior approval of the State 
Personnel Director and in extreme circumstances 
relating to critical positions and well-documented 
labor market conditions will salary increases be 
considered which equate to more than five percent 
for each grade provided by the reallocation. 
Personnel forms must include the justification. 

(d) (e) If the employee is to receive a 
performance salary increase on the same day as the 
reallocation, the performance increase shall be 
given before a reallocation increase is considered. 

(e) ff) When an employee's position is assigned 
to a lower grade, one of the following options will 
be implemented; 

(1) When reduction in level of the position 
results from management's removal of 
duties and responsibilities from the 
employee because of change in 
demonstrated motivation, capability, 
acceptance of responsibility, or lack of 
performance, the effect is the same as a 
demotion and the salary must be 
reduced at least to the maximum as 
required by the policy on demotion. 

(2) When reduction in level of the position 



results from position redesign because 
of management decisions on program 
changes, reorganization, or other 
management needs not associated with 
the employee's demonstrated 
motivation, capability, acceptance of 
responsibility or lack of performance, 
the salary of the employee may remain 
above the new maximum as long as the 
employee remains in the same 
classification or is promoted to a higher 
level position. No further increases, 
other than legislative increases, may be 
granted as long as the salary remains 
above the maximum. 

(3) When reduction in level of the position 
results from a change in the labor 
market or some other reason not related 
to change in the duties and 
responsibilities of the position, though 
the position must be reallocated to the 
approved classification and grade, 
management may elect to maintain the 
employee's current classification and 
grade by working the employee against 
the lower level position, so long as the 
employee continues to occupy the same 
position or is in the same classification. 

(4) Once the position is vacated, it shall be 
filled at the lower level. 

(f) fg) It is a management responsibility to avoid 
creation of salary inequities among employees. 
Each case must be evaluated to determine which of 
the salary administration alternatives is most 
appropriate, based on the circumstances as 
documented to the Office of State Personnel, on 
appropriate forms, by the employing agency. 

(g) ih) When an employee's position is assigned 
to the same grade level, the employee's salary 
shall remain unchanged. 

Statutory Authority G. S. 126-4. 

SECTION .1900 - HOURS OF WORK AND 
OVERTIME COMPENSATION 

. 1 928 COMPENSATION 

(a) The employee is to receive straight-time pay 
for a standard 40-hour workweek, with the 
provision that an additional amount equal to time 
and one-half the employee's regular hourly rate 
multiplied by the number of hours worked in 
excess of 40 will be added to the base pay. Such 
payment must be made in form of monetary 
compensation or compensable time off. It is the 



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PROPOSED RULES 



policy of the State of North Carolina, whenever 
possible, to give compensatory time off, in lieu of 
monetary compensation for hours worked in excess 
of 40 hours per work week. The decision as to 
whether to give compensatory time off, rather than 
monetary compensation, for overtime worked is 
solely within the discretion of management. 
Compensatory time off shall be scheduled by 
management, although reasonable effort should be 
made to accommodate the employee as to such 
scheduling. 

(b) An employee shall be given compensatory 
time off on the basis of one and one-half times the 
amount of time worked beyond 40 hours during a 
week; but such time off must be taken within 30 
days from the date the overtime is performed or by 
the end of the following p^i" — period calendar 
month , whichever is longer. If compensatory time 
off is not given by the end of the pay period 
calendar month following the 30-day period, the 
overtime pay must be included in the employee's 
next regular paycheck. Overtime worked shall be 
recorded and compensated in units of one-tenth of 
an hour. 

Note: The preceding provisions are not applicable 
to persons in law enforcement or fire protection 
activities and in-residence employees. 

(c) Prior to employment, each successful 
candidate for state employment in a position 
subject to hours of work and overtime pay 
standards must sign a form acknowledging that it 
has been explained to him that it is the the state's 
policy to give time off in lieu of monetary 
compensation, wherever possible, for hours 
worked beyond 40 in a work week. Agreement to 
this is a condition of employment with the state; 
failure or refusal to sign such agreement will 
prevent employment of that person. This signed 
form shall be a part of the employee's personnel 
file; it must be kept for at least three years 
following that person's separation from state 
employment. 

(d) Upon termination of employment, an 
employee shall be paid for unused compensatory 
time off at a rate of compensation not less than 
either the average regular rate received by such 
employee during the last three years of the 
employee's employment or the final regular rate 
received by such employee, whichever is higher. 

Statutory Authority G.S. 126-4. 

SUBCHAPTER IH - RECRUITMENT AND 
SELECTION 



SECTION .0600 - GENERAL PROVISIONS 

.0624 DISMISSAL 

Dismissal on the basis of knowingly and willfully 
providing false information on a state employment 
application, or knowingly and willfully concealing 
a dishonorable military discharge shall be 
accomplished in accordance with the State 
Personnel Commission's procedures on discipline 
and dismissal. Providing false information on an 
employment application or concealing information 
shall be considered personal conduct for the 
purposes of implementing the dismissal procedure, 
except that two weeks' pay in lieu of notice may 
be given upon the recommendation of the agency 
and the approval of the Office of State Personnel. 
Only employees who are permanen t career , as that 
term is defined in G.S. 126 39 126-1 A , are 
entitled to the procedures for dismissal set out in 
the State Personnel Commission's rules on 
dismissal. (Reference: 25 NCAC IJ .0600, 
DISCIPLINARY ACTION: SUSPENSION AND 
DISMISSAL, see .0608. DISMISSAL: CAUSES 
RELATING TO PERSONAL CONDUCT.) 

Statutory Authority G.S. 126-1 A; 126-4; 126-30; 
126-39. 

.0625 PROMOTIONAL PRIORITY 

CONSIDERATION FOR CURRENT 
EMPLOYEES 

(a) A promotional priority consideration shall be 
provided by all agencies to all current state 
employees who have achieved p e rmanont career 
status, as that term is defined in G.S. 126 39 126- 

iA- 

(b) The priority consideration which is to be 
given a state employee who applies for a position 
which represents a promotion for that employee 
and who otherwise meets the criteria set out in 
G.S. 126-7.1 is that he shall be offered the 
position in question. 

(c) "Substantially equal qualifications" occur 
when the employer cannot make a reasonable 
determination that the job-related qualifications 
held by one person are significantly better suited 
for the position than the job-related qualifications 
held by another person. 

Statutory Authority G.S. 126-1 A; 126-4; 126-7.1. 

.0628 RESOLUTION OF CONFLICT 
BETWEEN EMPLOYMENT 
PRIORITIES 

In the event that the applicant group includes 



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PROPOSED RULES 



both a qualified non-state employee veteran and a 
qualified current state employee with permanent 
career status as defined by G.S. 126 39 126-lA, 
who is seeking a promotional opportunity, the 
current state employee shall be oflFered the position 
if the appointing authority determines, consistent 
with the promotional priority policy, that the 
qualifications of the veteran and the current state 
employee are substantially equal. The same 
priority over any non-state employee applicant 
shall apply to state employees separated from 
policy making exempt positions for reasons other 
than cause, state employees notified or separated 
by reduction in force and on active priority 
reemployment status, and employees returning to 
state employment following a disability due to on 
the job injury. 

Statutory Authority G.S. 126-1 A; 126-4; 126-7.1; 
126-39. 

SUBCHAPTER IJ - EMPLOYEE 
RELATIONS 

SECTION .0600 - DISCIPLINARY ACTION: 
SUSPENSION AND DISMISSAL 

.0603 APPEALS 

(a) A permanent career employee who has been 
demoted, suspended or dismissed shall have 15 
calendar days from the date of his receipt of 
written notice of such action to file an appeal with 
his department/university grievance procedure. 
Grievances which do not allege discrimination 
must follow the department or university grievance 
procedure. An appeal of a final departmental or 
university decision must be filed in accordance 
with G.S. 150B-23 and within 30 calendar days of 
receipt of the final agency decision. 

(b) Grievances which allege discrimination may, 
at the election of the employee, proceed through 
the department or university procedure or proceed 
directly to the State Personnel Commission (SPC) 
for a hearing by the Office of Administrative 
Hearings (OAH) and a decision by the SPC. A 
direct appeal to the SPC (such appeal involving a 
contested case hearing by the OAH and a 
recommended decision by that agency to the SPC) 
alleging discrimination must be filed in accordance 
with G.S. 150B-23 and must be filed within 30 
calendar days of receipt of notice of the alleged 
discriminatory act. 

(c) Grievances filed on an untimely basis (see 
G.S. 126-35, G.S. 126-36 and G.S. 126-38) must 
be dismissed. Allegations of discrimination raised 



more than 30 calendar days after receipt of notice 
of the occurrence of the alleged discriminatory act 
must be dismissed. 

Statutory Authority G.S. 126-1 A; 126-35; 126-36; 
126-38; 150B, Article 3; 150B-23. 

.0604 CAUSES 

(a) Any employee, regardless of occupation, 
position or profession may be warned, demoted, 
suspended or dismissed by the appointing 
authority. Such actions may be taken against 
permanent career employees as defined at G.S. 
126 39 126-lA , only for just cause. The degree 
and type of action taken shall be based upon the 
sound and considered judgment of the appointing 
authority in accordance with the provisions of this 
Rule. 

(b) There are two bases for the discipline or 
dismissal of employees under the statutory 
standard of "just cause" as set out in G.S. 126-35. 
These two bases are: 

(1) Discipline or dismissal imposed on the 
basis of unacceptable job performance; 

(2) Discipline or dismissal imposed on the 
basis of unacceptable personal conduct. 

(c) The term "unacceptable job performance" 
means the failure to satisfactorily perform job 
requirements as specified in the job description, 
work plan, or as directed by management of the 
work unit or agency. Satisfactory performance is 
that performance which is reasonable under all the 
circumstances. Determination of satisfectory 
performance shall be made by the supervisor; there 
is a presumption that the determination is proper 
and factually supported. 

(d) The term "unacceptable personal conduct" is 
defined as: 

(1) conduct for which no reasonable person 
should expect to receive prior 
warnings; 

(2) job-related conduct which constitutes a 
violation of state or federal laws; 

(3) conviction of a felony or an off^ense 
involving moral turpitude; 

(4) the willful violation of known or 
written work rules: or 

(5) conduct unbecoming a state employee 
that is detrimental to state service. 

(e) Either unacceptable job performance or 
unacceptable personal conduct constitutes just 
cause for discipline or dismissal. The categories 
are not mutually exclusive, as certain actions by 
employees may fall into both categories, depending 
upon the facts of each case. 



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PROPOSED RULES 



Statutory Authority G.S. 126-1 A; 126-35. 

.0608 DISMISSAL: CAUSES RELATING TO 
PERSONAL CONDUCT 

(a) Employees may be dismissed, demoted, 
suspended or warned on the basis of unacceptable 
personal conduct. Discipline may be imposed, as 
a result of unacceptable conduct, up to and includ- 
ing dismissal without any prior warning to the 
employee. Oral or written warnings given for 
unacceptable personal conduct according to this 
Rule cannot be used to shorten the progressive 
warning process required to dismiss an employee 
on the basis of unsatisfectory job performance. 

(b) Disciplinary demotions, suspensions or 
dismissals for personal conduct require written 
notification to the employee. Such notification 
must include specific reasons for the discipline and 
notice of the employee's right of appeal. 

(c) Prior to dismissal of a permanent career 
employee on the basis of personal conduct, there 
shall be a pre-dismissal conference between the 
employee and the person recommending dismissal. 
This conference shall be held in accordance with 
the provision of 25 NCAC IJ .0606 (2), (3). 
Note: Failure to give specific written reasons for 
the dismissal shall cause the dismissal to be legally 
ineffective, and may require backpay and 
attorney's fees to be paid to the employee. Time 
limits for filing a grievance do not start until the 
employee receives written notice of his/her appeal 
rights. 

Statutory Authority G.S. 126-1 A; 126-4; 126-35. 

TITLE 26 - OFFICE OF 
ADMINISTRATIVE HEARINGS 

JSotice is hereby given in accordance with G.S. 
150B-21.2 that the Office of Administrative Hear- 
ings intends to amend rule cited as 26 NCAC 3 
.0007; and adopt rules cited as 26 NCAC 3 .0201 
- .0208. 

1 he proposed effective date of this action is 
February 1, 1994. 

1 he public hearing will be conducted at 9:00 
a.m. on December 2, 1993 at the Lee House, 
Hearing Room itl , 422 North Blount Street, Ra- 
leigh, N.C 27601. 



MXeason for Proposed Action: Ratification of HB 
657 (OAH Mediation Program) by the 1993 Ses- 
sion of the North Carolina General Assembly. 

(comment Procedures: Comments may be submit- 
ted in writing or in person at the public hearing or 
in writing prior to December 2, 1993 to Elaine R. 
Steinbeck, APA Coordinator, P. O. Drawer 27447, 
Raleigh, N.C. 27611-7447. 

CHAPTER 3 - HEARINGS DIVISION 

.0007 SETTLEMENT CONFERENCE 

(a) A settlement conference is for the primary 
purpose of assisting the parties in resolving dis- 
putes and for the secondary purpose of narrowing 
the issues and preparing for hearing. 

(b) Upon A settlement conference shall be held 
at the request of any party, er the administrative 
law judge, or the chi e f administrativ e law judg e 
Chief Administrative Law Judge. Upon receipt of 
the request, the Chief Administrative Law Judge 
shall assign the case to another administrative law 
judge for the purpose of conducting a settlement 
conference. Unless both parties and the adminis- 
trative law judge agree, a unilateral request for a 
settlement conference will not constitute good 
cause for a continuance. The conference shall be 
conducted at a time and place agreeable to all 
parties and the administrative law judge. It shall 
be conducted by telephone if any party would be 
required to travel more than 50 miles to attend, 
unless that party agrees to travel to the location set 
for the conference. If a telephone conference is 
scheduled, the parties must be available by tele- 
phone at the time of the conference. 

(c) All parties shall attend or be represented at 
a settlement conference. Parties or their represen- 
tatives shall be prepared to participate in settlement 
discussions. 

(d) The parties shall discuss the possibility of 
settlement before a settlement conference if they 
believe that a reasonable basis for settlement 
exists. 

(e) At the settlement conference, the parties 
shall be prepared to provide information and to 
discuss all matters required in Rule .0004 of this 
Chapter. 

(f) If, following a settlement conference, a 
settlement has not been reached but the parties 
have reached an agreement on any facts or other 
issues, the administrative law judge presiding over 
the settlement conference shall issue an order 



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utaai'.BHiiiUJi.u.iK 



WllfflMmiBI 



PROPOSED RULES 



confirming and approving, if necessary, those 
matters agreed upon. The order is binding on the 
administrative law judge who is assigned to hear 
the case. 

Statutory Authority G.S. 150B-3](b). 

SECTION .0200 - MEDIATION 
SETTLEMENT CONFERENCE 

.0201 ORDER FOR MEDIATED 

SETTLEMENT CONFERENCE 

(a) Order by Chief Administrative Law Judge. 
The Chief Administrative Law Judge may, by 
written order, require parties and their representa- 
tives to attend a pre-hearing mediated settlement 
conference in any contested case. 

(b) Timing of the Order. The Chief Administra- 
tive Law Judge may issue the order within 10 days 
of the filing of the contested case petition. Para- 
graph (c) of this Rule and Paragraph (b) of Rule 
.0203 of this Section shall govern the content of 
the order and the date of completion of the confer- 
ence. 

(c) Content of Order. The Chief Administrative 
Law Judge's order shall: 

(1) require the mediated settlement confer- 
ence be held in the contested case; 

(2) establish a deadline for the completion 
of the conference; 

(3) state clearly that the parties have the 
right to select their own mediator as 
provided in Rule .0202 of this Section; 

(4) state the rate of compensation of the 
mediator appointed by the Chief Ad- 
ministrative Law Judge in the event that 
the parties do not exercise their right to 
select a mediator pursuant to Rule 
.0202 of this Section; and 

(5) state that the parties shall be required to 
pay the mediator's fee at the conclusion 
of the settlement conference unless 
otherwise apportioned by the presiding 
Administrative Law Judge. 

(d) Motion to Dispense with Mediated Settle- 
ment Conference. A party may move the presid- 
ing Administrative Law Judge, within 10 days 
after the date of the Chief Administrative Law 
Judge's order, to dispense with the conference. 
Such motion shall state the reasons the relief is 
sought. For good cause shown, the presiding 
Administrative Law Judge may grant the motion. 

(e) Motion for Mediated Settlement Conference. 
In contested cases not ordered to mediated settle- 



ment conference, any party may move the presid- 



ing Administrative Law Judge to order such a 
conference. Such motion shall state the reasons 
why the order should be allowed and shall be 
served on non-moving parties. Objections may be 
filed in writing with the presiding Administrative 
Law Judge within 10 days after the date of the 
service of the motion. Thereafter, the presiding 
Administrative Law Judge shall rule upon the 
motion without a hearing and notify the parties or 
their attorneys of the ruling. 

Statutory Authority G.S I50B-23.1. 

.0202 SELECTION OF MEDIATOR 

(a) Selection of Certified Mediator by Agree- 
ment of Parties. The parties may select a certified 
mediator by agreement within 21 days of the Chief 
Administrative Law Judge's order. The 
petitioner's attorney shall file with the Office of 
Administrative Hearings a Notice of Selection of 
Mediator by Agreement within 21 days of the 
Chief Administrative Law Judge's order. Such 
notice shall include: the name, address and 
telephone number of the mediator selected; the rate 
of compensation of the mediator; the agreement of 
the parties as to the selection of the mediator and 
rate of compensation; and whether or not the 
mediator is certified. 

(b) Nomination and the Office of Administrative 
Hearings Approval of a Non-Certified Mediator. 
The parties may select a mediator who is not 
certified but who, in the opinion of the parties and 
the presiding Administrative Law Judge, is 
otherwise qualified by training or experience to 
mediate all or some of the issues in the action and 
who agrees to mediate indigent cases without pay. 
If the parties select a non-certified mediator, the 
petitioner's attorney shall file with the presiding 
Administrative Law Judge a Nomination of 
Non-Certified Mediator within 21 days of the 
Chief Administrative Law Judge's order. Such 
nomination shall include: the name, address and 
telephone number of the mediator; the training, 
experience or other qualifications of the mediator; 
the rate of compensation of the mediator; and the 
agreement of the parties as to the selection of the 
mediator and rate of compensation. TTie presiding 
Administrative Law Judge shall rule on the 
nomination without a hearing, shall approve or 
disapprove of the parties' nomination and shall 
notify the parties of the presiding Administrative 
Law Judge's decision. 

(c) Appointment of Mediator by the presiding 
Administrative Law Judge. If the parties cannot 
agree upon the selection of a mediator, the 



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PROPOSED RULES 



petitioner's attorney shall so notify the presiding 
Administrative Law Judge and request, on behalf 
of all parties, that the presiding Administrative 
Law Judge appoint a mediator. The motion must 
be filed within 21 days of the date of the Chief 
Administrative Law Judge's order and shall state 
that the attorneys for the parties have had a full 
and frank discussion concerning the selection of a 
mediator and have been unable to agree. Upon 
receipt of a motion to appoint a mediator, or in the 
event the petitioner's attorney has not filed a 
Notice of Selection or Nomination of 
Non-Certified Mediator with the presiding 
Administrative Law Judge within 21 days of the 
Chief Administrative Law Judge's order, the 
presiding Administrative Law Judge shall appoint 
a certified mediator. Only mediators who agree to 
mediate indigent cases without pay shall be 
appointed. 

(d) Mediator Information Directory. To assist 
the parties in the selection of a mediator by 
agreement, the Oflice of Administrative Hearings 
shall prepare and keep current a list of certified 
mediators who wish to mediate contested cases. 
The list shall be kept in the Office of 
Administrative Hearings and made available to the 
parties upon request. 

(e) Disqualification of Mediator. Any party 
may move for an order disqualifying the mediator. 
For good cause, such order shall be entered. If 
the mediator is disqualified, a replacement 
mediator shall be selected by the parties or 
appointed by the presiding Administrative Law 
Judge pursuant to this Rule. Nothing m this 
Paragraph shall preclude mediators from 
disqualifying themselves. 

Statutory Authority G.S. 150B-23.1. 

.0203 MEDIATION SETTLEMENT 
CONFERENCE 

(a) Where Conference is to be Held. Unless all 
parties and the mediator otherwise agree, the 
mediated settlement conference shall be held in the 
courthouse or other public building m the county 
where the contested case is pending. The 
mediator shall be responsible for reserving a place 
and making arrangements for the conference and 
for giving timely notice to all attorneys and 
unrepresented parties of the time and location of 
the conference. 

(b) When Conference is to be Held. The Chief 
Administrative Law Judge's order issued pursuant 
to Paragraph (b) of Rule .0201 of this Section shall 
clearly state a date of completion for the 



conference. Such date shall not be less than 90 
days or more than 120 days after the issuance of 
the Chief Administrative Law Judge's order. The 
Chief Administrative Law Judge may shorten these 
time limits in order to meet statutorily imposed 
deadlines for the hearing of certain types of 
contested cases. 

(c) Request to Extend Date of Completion. A 
party, or the mediator, may request the presiding 
Administrative Law Judge to extend the deadline 
for completion of the conference. Such request 
shall state the reasons the continuance is sought 
and shall be served by the moving party upon the 
other parties and the mediator. The presiding 
Administrative Law Judge may grant the request 
and enter an order setting a new date for the 
completion of the conference, which date may be 
set at any time prior to hearing. Such order shall 
be served upon the parties and the mediator. 

(d) Recesses. The mediator may recess the 



conference at any time and may set times for 
reconvening. No further notification is required 
for persons present at the recessed conference. 

(e) The Mediated Settlement Conference Is Not 
To Delay Other Proceedings. The mediated 
settlement conference shall not be cause for the 
delay of other proceedings in the contested case, 
including the completion of discovery, the filing or 
hearing of motions, or the hearing of the contested 
case, except by order of the presiding 
Administrative Law Judge. 

Statutory Authority G.S. 150B-23.1. 

.0204 DUTIES OF PARTIES, 

REPRESENTATIVES, AND 
ATTORNEYS 

(a) Attendance. The following persons shall 
physically attend a mediated settlement conference: 
(1) All individual parties; or an officer, 
director or employee having authority 
to settle the claim for a corporate party; 
or in the case of a governmental 
agency, a representative of that agency 
with full authority to negotiate on 
behalf of the agency and to recommend 
settlement to the appropriate decision 
making body of the agency; and 
The party's counsel of record, if any; 
and 

For any insured party against whom a 
claim is made, a representative of the 
insurance carrier who is not such 
carrier's outside counsel and who has 
fiill authority to settle the claim. 



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PROPOSED RULES 



(h) Finalizing Agreement. Upon reaching 
agreement, the parties shall reduce the agreement 
to writing and sign it along with their counsel. By 
stipulation of the parties and at their expense, the 
agreement may be electronically or 
stenographically recorded. A consent judgment, 
voluntary dismissal, or withdrawal of petition shall 
be filed with the Office of Administrative Hearings 
by such persons as the parties shall designate. 

(c) Payment of Mediator's Fee. The parties 
shall pay the mediator's fee as provided by Rule 
■ 0207 of this Section. 

Statutory Authority G.S. 1508-23.1. 

.0205 SANCTIONS FOR FAILURE TO 
ATTEND 

If a person fails to attend a duly ordered 
mediated settlement conference without good 
cause, the presiding Administrative Law Judge 
may impose upon the party or his principal any 
lawful sanction authorized by G.S. 150B-33(b)(8) 
or (10). 

Statutory Authority G.S. 150B-23.1. 

.0206 AUTHORITl AND DUTIES OF 
MEDIATORS 

(a) Authority of Mediator. 

(1) Control of Conference. The mediator 
shall at aU times be in control of the 
conference and the procedures to be 
followed. 

(2) Private Consultation. The mediator 
may meet and consult privately with 
any party or parties or their counsel 
during the conference. 

(3) Scheduling the Conference. The 
mediator shall make a good faith effort 
to schedule the conference at a time 
that is convenient with the parties, 
attorneys and mediator. In the absence 
of agreement, the mediator shall select 
the date for the conference. 

(b) Duties of Mediator. 

(1) The mediator shall define and describe 
the following to the parties at the 
beginning of the conference: 

(A) The process of mediation; 

(B) TTie differences between mediation 
and other forms of conflict resolution; 

(C) The costs of the mediated settlement 
conference; 

(D) The facts that the mediated settlement 
conference is not a hearing, the 



IE) 

IE) 

im 
m 



mediator is not a judge, and the par- 
ties retain their right to a hearing if 
they do not reach settlement; 
The circumstances under which the 
mediator may meet alone with either 
of the parties or with any other per- 
son; 

Whether and under what conditions 
communications with the mediator 



;onfidence during the 



will be held in 

conference; 

The inadmissibility of conduct and 

statements as provided by Rule 408 of 

the North Carolina Rules of Evidence; 

The duties and responsibilities of the 

mediator and the parties; and 

The fact that any agreement reached 

will be reached by mutual consent of 

the parties. 

(2) Disclosure. The mediator has a duty to 
be impartial and to advise all parties of 
any circumstances bearing on possible 
bias, prejudice or partiality. 

(3) Declaring Impasse. It is the duty of the 
mediator to timely determine when 
mediation is not viable, that an impasse 
exists, or that mediation should end. 

(4) Reporting Results of Conference. The 
mediator shall file a written report with 
the parties and presiding Administrative 
Law Judge as to whether or not agree- 
ment was reached by the parties. If a 
full agreement was reached, the report 
shall state whether the action will be 
concluded by consent judgment, volun- 
tary dismissal, or withdrawal of petition 
and shall identify the persons designat- 
ed to file such pleadings. If a full 
agreement is not reached, the report 
shall state the nature of any partial 
agreement and set out the terms of 
those matters agreed upon. A copy of 
the Mediator's report shall also be 
provided to the Attorney General of 
North Carolina or hjs designee respon- 
sible for evaluating the mediation pro- 
gram pursuant to the 1993 N.C. Session 
Laws, c^ 363. s^ 2^ 

(5) Scheduling and Holding the Confer- 
ence. It is the duty of the mediator to 
schedule the conference and conduct it 
prior to the conference completion 
deadline set out in the Chief Adminis- 
trative Law Judge's order. Deadlines 
for completion of the conference shall 



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PROPOSED RULES 



be strictly observed by the mediator 
unless said time limit is changed by a 
written order of the presiding Adminis- 
trative Law Judge. 

Statutory Authority G.S. 1508-23.1. 

.0207 COMPENSATION OF THE 
MEDIATOR 

(a) By Agreement. When the mediator is 
stipulated to by the parties, compensation shall be 
as agreed upon between the parties and the media- 
tor. 

(b) By Order. When the mediator is a ppointed 
by the Office of Administrative Hearings, the 
mediator shall be compensated by the parties at the 
uniform hourly rate set by the Chief Administra- 
tive Law Judge. 

(c) Indigent Cases. No party found to be 
indigent by the presiding Administrative Law 
Judge for the purposes of these Rules shall be 
required to pay a mediator appointed or selected 
pursuant to these Rules. Any mediator conducting 
a settlement conference pursuant to these Rules 
shall waive the payment of fees from parties found 
by the presiding Administrative Law Judge to be 
indigent. Any party may move the presiding 
Administrative Law Judge for a finding of indi- 
gence and to be relieved of the obligation to pay 
that party's share of the mediator's compensation. 
Such motion shall be heard subsequent to the 
completion of the conference or. if the parties do 
not settle their contested case, subsequent to the 
conclusion of tlie contested case hearing but prior 
to the issuance of the Administrative Law Judge's 
recommended or final decision. The presiding 
Administrative Law Judge may take into consider- 
ation the outcome of the contested case. The 
presiding Administrative Law Judge shall enter an 
order granting or denying a party's request. 

(d) Payment of Compensation by Parties. 
Unless otherwise agreed to by tlie parties or 
ordered by the presiding Administrative Law 
Judge, costs of the mediated settlement conference 
shall be paid: one share by tlie petitioner, one 
share by the respondent and an equal share by any 
intervenor. Parties obligated to gay a share of the 
costs shall pay them equally. Payment shall be 
due upon completion of the conference. 

Statutory Authority G.S 150B-23.1. 

.0208 MEDIATOR 

For purposes of this Section the term "certified 
mediator" shall mean a person who is currently 



certified as a mediator by the Administrative 
Office of the Courts pursuant to Rule 8 of the 
North Carolina Supreme Court's Rules of Mediat- 
ed Settlement Conferences. 329 N.C. 795. effec- 
tive December 1. 1993 and as may be subsequent- 
ly amended. 

Statutory Authority G.S. 150B-23.1. 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1484 



RRC OBJECTIONS 



1 he Rules Review Commission (RRC) objected to the following rules in accordance with G.S. 
143B-30.2(c). State agencies are required to respond to RRC as provided in G.S. 143B-30.2(d). 



ADMINISTRATION 

Department of Administration's Minimum Criteria 

1 NCAC 39 .0101 - Purpose 
No Response from Agency 
Agency Responded 
Agency Rex'ised Rule 

1 NCAC 39 .0301 - Kxceptions to Minimum Criteria 

No Response from Agency 
Agency Responded 
Agency Revised Rule 

AGRICULTURE 

North Carolina State Fair 

2 NCAC 20B .0102 - Traffic Regulations 

Agency Revised Rule 
2 NCAC 20B .0106- General 
2 NCAC 20B .0204 - Forfeiture 

Agency Rexised Rule 

Plant Industry 

2 NCAC 48C .0023 - Analysis for Farmers or Seedmen 
Agency Revised Rule 

ENVIRONMENT, HEALTH, AND NATURAL RESOURCES 

Coastal Management 

15A NCAC 7H .2002 - Approval Procedures 
ISA NCAC 7H .2004 - General Conditions 

Environmental Management 

ISA NCAC 2H .0610 - Permit Requirements for Toxic Air Pollutants 

Agency Rex'ised Rule 
ISA NCAC 2H .1110 - Implementation 

Agency Responded 

Agency Responded 

Agency Responded 

Agency Responded 

No Response from Agency 

Agency Responded 
ISA NCAC 2L .0103 - Policy 



RRC Objection 
Obj. Cont'd 
Obj. Cont'd 
Obj. Removed 
RRC Objection 
Obj. Cont'd 
Obj. Cont'd 
Obj. Removed 



RRC Objection 
Obj. Removed 
RRC Objection 
RRC Objection 
Obj. Removed 



RRC Objection 
Obj. Removed 



RRC Objection 
RRC Objection 



06/17/93 
07/1S/93 
08/20/93 
09/17/93 
06/17/93 
07/1S/93 
08/20/93 
09/17/93 



09/17/93 
09/17/93 
09/17/93 
09/17/93 
09/17/93 



09/17/93 
09/17/93 



09/17/93 
09/17/93 



RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 


RRC Objection 


02/18/93 


Obj. Cont'd 


03/18/93 


Obj. Cont'd 


OS /1 9/93 


Obj. Cont'd 


06/17/93 


Obj. Cont'd 


07/1S/93 


Obj. Cont'd 


08/20/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 



1485 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



RRC OBJECTIONS 



Agency Revised Rule 
15A NCAC 2L .0104 - RS Designation 

Agency Revised Rule 
15A NCAC 2L .0113 - Variance 

Agency Revised Rule 
15A NCAC 2L . 0201 - Ground\mter Classifications 

Agency Revised Rule 



RRC Objection 


09/17/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 



Health: Epidemiology 

15A NCAC 19B .0301 - Application for Initial Permit 

Agency Revised Rule 
ISA NCAC 19B .0304 - Conditions for Renewal of Permit 

Agency Revised Rule 
ISA NCAC 19B .0309 - Qualification of Maintenance Personnel 

Agency Revised Rule 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



09/17/93 
09/17/93 
09/17/93 
09/17/93 
09/17/93 
09/17/93 



Health: Personal Health 



ISA NCAC 21 D .OSOl - Allowable Foods 

Agency Revised Rule 
ISA NCAC 21D . 1204 - Client Eligibility 

Agency Revised Rule 
ISA NCAC 21D . 1207 - Payment for Reimbursable Services 

Agency Revised Rule 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



09/17/93 
09/17/93 
09/17/93 
09/17/93 
09/17/93 
09/17/93 



humtvn resources 

Children's Services 



10 NCAC 41 R .0002 - Administration and Organization 
Agency Responded 
Rule Returned to Agency 
Agency Filed Rule for Codification Over RRC Objection 



RRC Objection 07/1S/93 

Obj. Cont'd 08/20/93 

Obj. Cont'd 09/17/93 

Eff. 10/01/93 



Medical Assistance 



W NCAC 26B .0112 - North Carolina Specialty Hospital Services 
Agency Revised Rule 



RRC Objection 
Obj. Removed 



09/17/93 
09/17/93 



LICENSING BOARDS AND COMMISSIONS 



Foresters 



21 NCAC 20 .0020 - Certification of Consulting Foresters 
21 NCAC 20 .0021 - Rejection of Consultant Affidavit 
21 NCAC 20 .0022 - Handling of Complaints 



RRC Objection 09/17/93 
RRC Objection 09/17/93 
RRC Objection 09/17/93 



Landscape Architects 



21 NCAC 26 .020S - Forms of Practice 
Rule Returned to Agency 
Agency Filed Rule for Codification Over RRC Objection 

21 NCAC 26 .0207 - Application of Professional Seal 
Rule Returned to Agency 



RRC Objection 06/17/93 

07/15/93 

Eff. 08/01/93 

RRC Objection 06/17/93 
07/1S/93 



8:15 



NORTH CAROLINA REGISTER 



November I, 1993 



1486 



RRC OBJECTIONS 



Agency Filed Rule for Codification Over RRC Objection 

21 NCAC 26 .0208 - Improper Conduct 
Rule Returned to Agency 
Agency Filed Rule for Codification Over RRC Objection 

Social Work 

21 NCAC 63 .0210 - Provisional Certificates 
Agency Revised Rule 
Agency Revised Rule 

PUBLIC EDUCATION 

Elementary and Secondary Education 

16 NCAC 6C .0312 - Certificate Suspension and Revocation 
Agency Revised Rule 

REVENUE 



Eff. 08/01/93 

RRC Objection 06/1 7/93 

07/15/93 

Eff. 08/01/93 



RRC Objection 08/20/93 
RRC Objection 08/20/93 
Obj. Removed 09/17/93 



RRC Objection 
Obj. Removed 



09/17/93 
09/17/93 



Departmental Rules 

1 7 NCAC 1 C . 0502 - Method of Payment 

Agency Revised Rule 
1 7 NCAC 1 C . 0503 - EFT Definitions 

Agency Revised Rule 

Sales and Use Tax 

1 7 NCAC 7B . 1907 - Scrap Tire Disposal Tax 
Agency Revised Rule 

TRANSPORTATION 



RRC Objection 09/17/93 

Obj. Removed 09/17/93 

RRC Objection 09/17/93 

Obj. Removed 09/17/93 



RRC Objection 
Obj. Removed 



09/17/93 
09/17/93 



Division of Highways 



19A NCAC 2B .0162 - Delegation to Manager of Program and Policy 

Agency Revised Rule 
19A NCAC 2B .0164- Use of Right of Wby Consultants 

Agency Revised Rule 
19A NCAC 23 .0208 - Uniform Traffic Control Devices 

Agency Revised Rule 
19A NCAC 2B .0225 - Blue Star Memorial Highway Signs 

Agency Revised Rule 
19A NCAC 2B .0602 - Obtaining a Driveway Construction Permit 

Agency Withdrew Rule 
19A NCAC 2D .0801 - Pre- Qualifying to Bid: Requalification 
19A NCAC 2D .0802 - Invitation to Bid 
19A NCAC 2D .0803 - Advertisement and Invitations for Bids 
19A NCAC 2D .0815 - Rejection of Bids 

Agency Revised Rule 
19A NCAC 2D .0821 - Return of Bid Bond or Bid Deposit 
19A NCAC 2D .0825 - Confidentiality of Cost Estimates and Bidding Lists 

Agency Revised Rule 
19A NCAC 2E .0217 - Specific Information Program Definitions 



RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/1 7/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 




09/17/93 


RRC Objection 


09/17/93 


RRC Objection 


09/17/93 


RRC Objection 


09/17/93 


RRC Objection 


09/1 7/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 


RRC Objection 


09/17/93 


Obj. Removed 


09/17/93 


RRC Objection 


09/17/93 



1487 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



RRC OBJECTIONS 



) 



Agency Revised Rule 
19A NCAC 2E .0220 - Composition of Signs 

Agency Revised Rule 
19A NCAC 2E .0222 - Contracts with the Department 

Agency Revised Rule 



Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



09/17/93 
09/17/93 
09/17/93 
09/17/93 
09/17/93 



"^ 



I 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1488 



gnt ^ w gia g trLWjjci i grann 



RITES INVALIDATED BY JUDICIAL DECISION 



1 his Section of the Register /Lvte the recent decisions issued by the North Carolina Supreme Court. 
Court of Appeals, Superior Court (when available), and the Office of Administrative Hearings which 
invalidate a rule in the North Carolina Administrative Code. 



1 NCAC 5A .0010 - ADMINISTRATIVE PROCEDURES 

Thomas R. West. Administrative Law Judge with the Office of Administrative Hearings, declared two portions 
of Rule 1 NCAC 5A .0010 void as applied in Stauffer Information Systems, Petitioner v. The North Carolina 
Department of Community Colleges and The North Carolina Department of Administration , Respondent and 
The University of Southern California, Intervenor-Resporjdent (92 DOA 0666). 

10 NCAC 3H .0315(b) - NURSING HOME PATIENT OR RESIDENT RIGHTS 

Dolores O. Nesnow. Administrative Law Judge with the Office of Administrative Hearings, declared Rule 10 
NCAC 3H .0315(13) void as applied in Barbara Jones, Petitioner v. North Carolina Department of Human 
Resources, Division of Facility Services, Licensure Section, Respondent (92 DHR 1192). 

10 NCAC 3R .1124(f) - ACCESSIBILITY' TO SERVICES 

Beecher R. Gray. Administrati\e Law Judge with the Office of Administrative Hearings, declared Rule 10 
NCAC 3R .1124(f) void as applied in Britthaven, Inc. d/h/a Britthaven of Morganton. Petitioner v. N.C. 
Department of Human Resources, Division of Facility Services, Certificate of Need Section, Respondent and 
Valdese Nursing Home, Inc., Respondent-Intervenor (92 DHR 1785). 

15A NCAC 30 .0201(a)(1)(A) - STDS FOR SHELLFISH BOTTOM & WATER COLUTVIN LEASES 

Julian Mann IIL Chief Administrative Law Judge v.ith the Office of Administrative Hearings, declared Rule 
15A NCAC 30 .0201(a)(1)(A) void as applied in William R. Willis. Petitioner v. North Carolina Division of 
Marine Fisheries. Respondent (92 EHR 0820). 

15A NCAC 19A .0202(d)(10) - CONTROL MEASURES - HIV 

Brenda B. Becton. Administrative Lav.' Judge with the Office of Administratise Hearings, declared Rule 15A 
NCAC 19A .0202(d)( 10) \oid as applied in ACT-UP TRIANGLE (.AIDS Coalition to Unleash Power Triangle). 
Ste\-en Harris, and John Doe, Petitioners v. Commission for Health Services of the State of North Carolina, 
Ron Levine, as Assistant Secretary of Health and State Health Director for the Department of Environment. 
Health, and Natural Resources of the State of North Carolina. William Cohey. as Secretary of the Department 
of Emironment. Health, and Natural Resources of the State of North Carolina. Dr. Rebecca Meriwether, as 
Chief Communicable Disease Control Section of the North Carolina Department of Environment. Health, and 
Natural Resources, Wjyne Bobbitt Jr. , as Chief of the HIV/^TD Control Branch of the .Worth Carolina 
Department of Emironment, Health, and Natural Resources, Respondents (91 EHR 0818). 



1489 8:15 NORTH CAROLINA REGISTER November 1, 1993 



CONTESTED CASE DECISIONS 



y 



1 his Section contains the full text of some of the more significant Administrative Law Judge decisions 
along with an index to all recent contested cases decisions which are filed under North Carolina 's 
Administrative Procedure Act. Copies of the decisions listed in the index and not published are available 
upon request for a minimal charge by contacting the Office of Administrative Hearings, (919) 733-2698. 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



ADMINISTRATION 

LMS Express, Inc. v. Administration, Div of Purchase & Contract 92 DOA 0735 

Stauffcr Information Systems v. Community Colleges & Administration 92 DOA 0803 

McLaurin lurking Co. v. Administration 92 DOA 1662 

Warren H. Arrington Jr. v. Division of Purchase & Contract 93 DOA 0132 

ALCOHOLIC BEVERAGE CONTROL COMMISSION 



Morgan 06/04/93 

West 06/10/93 

Morrison 04/02/93 

West 07/21/93 



\:1 NCR 613 
;;3 NCR 320 



^ 



Alcoholic Beverage Conlrol Comm. v. Ann Oldham McDowell 
Curtis Ray Lynch v. Alcoholic Beverage Control Comm. 
Alcoholic Beverage Control Comm. v. Ezra Everett Rigshee 
Alcoholic Beverage Control Comm. v. Partnership. Phillip Owen Edward 
Alcoholic Beverage Control Comm. v. Gary Morgan Neugent 
Alcoholic Beverage Control Comm. v. Azzat Aly Amer 
Alcoholic Beverage Control Comm. v. Kirty Ronald Eldri<%e 
Alcoholic Beverage Control Comm. v. Gloria Black McDuffie 
Alcoholic Beverage Conlrol Comm. v. Larry Isacc Hailstock 
Alcoholic Beverage Control Comm. v. Anthony Ralph Cccchini Jr. 
Johnnie L. Baker v. Alcoholic Beverage Control Commission 
RAMSAC Enterprises, Inc. v. Alcoholic Beverage Control Comm. 
Alcoholic Beverage Control Comm. v. Aubrey Rudolph Wallace 
Alcoholic Beverage Control Comm. v. Mermaid, Inc. 
Alcoholic Beverage Control Comm. v. Majdi Khalid Wahdan 
Cornelius Hines T/A Eborry Lounge v. Alcoholic Beverage Ctl. Comm. 
Alcoholic Beverage Conlrol Comm. v. Homer I^trick Godwin Jr. 
Alcoholic Beverage Control Comm. v. Wanda Lou Ball 
Charles Anthonious Morant v. Alcoholic Beverage Conlrol Comm. 
Alcoholic Beverage Control Comm. v. Billy Fincher McSwain Jr. 
Jean Hoggard Askew v. Alcoholic Beverage Conlrol Commission 
ABC Comm. v. Rarlnership/T/A Corrolhers Comty Clr & Private Club 
Alcoholic Beverage Control Comm. v. James Elvwod Alphin 
Alcoholic Beverage Control Comm. v. James William Campbell 
Barbara Locklearv. Alcoholic Beverage Conlrol Commission 
Zachary Andrt Jones v. Alcoholic Beverage Control Commission 
Alcoholic Beverage Control Comm. v. Mack Ray Chapman 
Alcoholic Beverage Conlrol Comm. v. Bistro Enterprises, Inc. 
Alcoholic Beverage Conlrol Comm. v. Richaid Donald James Jr. 
William Vernon Franklin & Gene Carroll Daniels v. ABC Commission 
Alcoholic Beverage Control Comm. v. Citizens Fuel Company 
Alcoholic Beverage Conlrol Comm. v. Citizens Fuel Company 
Alcoholic Beverage Control Comm. v. Mohammad Salim Pirini 
Charles Edwanj Hare, Club Paradise v. Alcoholic Beverage Ctl. Comm. 
Alcohlic Beverage Control Comm. v. Parlneiship l/a RJ's Store 
Alcoholic Bev. Control Conma. v. Mild & Wild, Inc., Sheila Scholz 



92 ABC 0260 


Morgan 


04/01/93 


92 ABC 0288 


Gray 


05/18/93 


92 ABC 0702 


West 


07/30/93 


92 ABC 0978 


Gray 


05/28/93 


92 ABC 1086 


Bee ton 


03/22/93 


92 ABC 1149 


Reilly 


09/01/93 


92 ABC 1153 


Chess 


04/26/93 


92 ABC 1476 


West 


05/26/93 


92 ABC 1483 


Reilly 


04/07/93 


92 ABC 1690 


Morgan 


06/29/93 


92 ABC 1735 


Chess 


05/07/93 


93 ABC 0002 


Morrison 


07/02/93 


93 ABC 0047 


Gray 


05/28/93 


93 ABC 0076 


Gray 


08/04/93 


93 ABC 0087 


Becton 


07/06/93 


93 ABC 0118 


Morrison 


08/04/93 


93 ABC 0125 


Reilly 


05/13/93 


93 ABC 0182 


Nesnow 


07/29/93 


93 ABC 0232 


Chess 


07/20/93 


93 ABC 0239 


Gray 


08/26/93 


93 ABC 0255 


West 


09/10/93 


93 ABC 0318 


Reilly 


07/22/93 


93 ABC 0326 


Gray 


08/26/93 


93 ABC 0327 


Gray 


08/09/93 


93 ABC 0395 


West 


09/14/93 


93 ABC 0421 


West 


09/13/93 


93 ABC 0423 


Gray 


09/17/93 


93 ABC 0430 


Reilly 


10/07/93 


93 ABC 0431 


Nesnow 


09/01/93 


93 ABC 0570 


Reilly 


09/17/93 


93 ABC 0611 


West 


10/12/93 


93 ABC 0613 


West 


10/11/93 


93 ABC 0616 


West 


10/13/93 


93 ABC 0644 


Gray 


08/10/93 


93 ABC 0860 


Mann 


09/29/93 


93 ABC 1475 


Nesnow 


03/23/93 



8:9 NCR 785 



COMMERCE 



I 



Lester Moore v. Wealherization Assistance Program 

CRIME CONTROL AND PUBLIC SAFETY 

George W. P^lor v. Crime Victims Compensation Comm. 
Steven A. Bamer v. Crime Victims Compensation Comm. 
Anthony L. Hart v. Victims Compensation Comm. 



93 COM 0105 Gray 



03/08/93 



91 CPS 1286 


Morgan 


04/27/93 


92 CPS 0453 


Nesnow 


06/01/93 


92 CPS 0937 


Chess 


03/01/93 



8:15 



NORTH CAROLINA REGISTER 



November I, 1993 



1490 



%. UtJ l Am ' WBiMJ II Ot l M 



CONTESTED CASE DECISIONS 



AGENCY 



Jennifer Ayere v. Crime Victims Compensation Comm. 
Janie L. Howand v. Crime Victims Compensation Comm. 
Isabelle Hyman v. Crime Victims Compensation Comm. 
James G. Pellom v. Crime Control <& Public Safety 
Norman E. Brown v. Victims Compensation Commission 
Moses H. Cone Mem Hosp v. Victims Compensation Comm. 
Da\id & Jane Spano v. Crime Control & I^uhlic Safety 
Phillip Edward Moort v. Crime Control & Public Safety 
Norma Jean Purkctt v. Crime Victims Compensation Comm. 
Sheila Carter v. Crime Control and Public Safely 
John Willie Leach v. Crime Victims Compensation Comm. 
Nellie R. Mangum v. Crime Victims Compensation Comm. 
Constance Brown v. Crime Victims Compensation Comm. 
Susan Coy v. Crime Victims Compensation Commission 



CASE 




DATE OF 


NUMBER 


ALJ 


DECISION 


92 CPS 1195 


ReiUy 


03/19/93 


92CPS 1787 


Reilly 


03/26/93 


92 CPS 1807 


Morrison 


05/24/93 


93 CPS 0034 


Gray 


05/05/93 


93 CPS 0141 


West 


07/07/93 


93 CPS 0152 


Nesnow 


04/02/93 


93 CPS 0160 


Nesncrw 


07/30/93 


93 CPS 0169 


Nesnoft' 


05/20/93 


93 CPS 0205 


West 


08/27/93 


93 CPS 0249 


Morgan 


08/25/93 


93 CPS 0263 


Morrison 


05/20/93 


93 CPS 0303 


Morrison 


06/08/93 


93 CPS 0351 


Reilly 


05/24/93 


93 CPS 0623 


Rcilly 


09/22/93 



PUBLISHED DECISION 
REGISTER CITATION 



f 



8:3 NCR 327 
8:10 NCR S62 



8:12 NCR 1171 



ENVIRONMENT. HEALTH. AND NATURAL RESOURCES 



Charles L. Wilson v. Environment, Health, & Natural Resources 
J. Bruce Mulligan v. Environment, Health, &. Nalrual Resources 
Michael D. Barnes v. Onslow Cty Hlth & Environment and EHR 
William E. Fmck v. Environment. Health, &. Natural Resources 
Utle>- C. Slallings v. Environment. Health, & Natural Resources 
Dora Mae Blount on behalf of Joseph T. Midgette v. Hyde Cty 

Bd /Commissi oners, H><ie Cty Bd/Health. & Environment. 

Health, & Natural Resources 
A.J. Ballard Jr. Tirc & Oil Co.. Inc. v. Env.. Health, &. Nat. Res. 
Safeway Remcnal. Inc. v. Environment, Health. &. Natural Res. 
White Oak Chapter of the Izaak Walton League, Inc., and 

National Parks and Conservation Association. Inc. v. 

Division o^ Solid Waste Management, EHR and Haywood County 
Elizabeth City/I^quolank Cty Mun Airport Auth v. EHNR 
Interstate Brands Corp & Donald Leffew v. Env.. Health, & Nat. Res. 
Serv'ice Oil Company v. Environment. Health. & Natural Resources 
Interstate Brands Corp &. Donald Leffew v. Env.. Health, &. Nat. Res. 
Residents of Camm &. Shell v. Health Environmental - Septic Tank Div. 
City of Salisbury v. Environment, Health. &. Natural Resources 
Willie M. Watford v. Hertford Gates District Health Department 
Standard Speciality Contractors, Inc. v. EHNR 
Shawqi A. Jaber v. Environment. Health. &. Natural Resources 
McLeod Leather & Belting Co., Inc. v. Env., Health. & Natural Res. 
Angela Power. Albert Power v. Children's Special Health Svcs. 
Rayco Utilities. Inc. v. Environment. Health, & Natural Resources 
Ert^ Lamar Grainger v. Environment, Health, &. Natural Resources 
Mustafa E. Essa v. Environment, Health, Sl Natural Resourc~es 
Charlie Garfield McPhetson Swine Farm v. Env,. Health, &. Nat. Res. 
Rosetta Brimage, Vanessa f^ck v. Env. Health of Craven County 
R.L. Stowe Mills, Inc. v. Environment, Health, &. Natural Resources 
O.C. Slaffond/Larry Hane>' v. Montgomery Cty. Health Dept. 
Fred M. Grooms v. Environment. Health, &. Natural Resources 
Bobt^ Anderson v. Environment. Health, &. Natural Resources 
Shell Bros. Dist., Inc. v. Environment, Health. & Natural Resources 
Fred C. Gosnell & wife. Patricia T. Gosnell v. Env.. Health, & Nat. Res. 
Holding Bros., Inc. v. Environment, Health. &. Natural Resources 
Hamilton Beach/Proctor-Silex. Inc. v. Environment, Health. &. Natrl Res 
Blue Ridge Env. Defense League. Inc. v. Env.. Health, &. Natrl Res 



9 1 EHR 0664 


Morgan 


03/23/93 




9 1 EHR 0773 


West 


07/13/93 




9 1 EHR 0825 


Morgan 


06/21/93 




92 EHR 0040 


Gray 


06/14/93 




92 EHR 0062 


Gray 


03/15/93 




92 EHR 0400 


Gray 


10/15/93 




92 EHR 0754 


Nesnow 


08/30/93 




92 EHR 0826 


West 


03/12/93 


8:1 NCR 83 


92 EHR 0881 


West 


09/14/93 




92 EHR 1140 


Gray 


04/13/93 




92 EHR 1201*" 


Reilly 


08/12/93 




92 EHR 1205 


Reilly 


05/27/93 




92 EHR 1224*" 


Reilly 


08/12/93 




92 EHR 1462 


Morrison 


08/25/93 




92 EHR 1472 


Morrison 


04/22/93 




92 EHR 1600 


Chess 


03/24/93 




92 EHR 1660 


Reilly 


05/21/93 




92 EHR 1784 


Becton 


07/07/93 




93 EHR 0003 


Morgan 


10/11/93 


8:15 NCR 1503 


93 EHR 0008 


Becton 


03/24/93 




93 EHR 0063 


Morrison 


09/17/93 




93 EHR 0071 


Reilly 


06/21/93 




93 EHR 0146 


Gray 


03/29/93 




93 EHR 0181 


Reilly 


07/23/93 


8:10 NCR 870 


93 EHR 0206 


Nesnow 


05/20/93 




93 EHR 0219 


Morrison 


08/11/93 


8:11 NCR 996 


93 EHR 0224 


Gray 


06/07/93 




93 EHR 0276 


West 


08/27/93 


8:12 NCR 1176 


93 EHR 0299 


Reilly 


06/07/93 




93 EHR 0308 


Becton 


05/18/93 




93 EHR 0340 


Bee ton 


08/11/93 




93 EHR 0380 


Nesnow 


08/03/93 


8:11 NCR 1001 


93 EHR 0477 


Reilly 


06/29/93 




93 EHR 0862 


Nesnow 


10/11/93 





# 



iRHVLys ri^:lations commission 



Human Relations Comm. on behalf of Tyrone Clark v. Myrtle Wilson 
Human Relations Comm. on behalf of Marsha Crisco v. Hayden Morrison 



92 HRC 0560 


Becton 


09/07/93 


8:13 NCR 1287 


93 HRC 0167 


Reilly 


08/18/93 


8:12 NCR 1168 



< 



1491 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



CONTESTED CASE DECISIONS 



) 



■^ 



I 



AGENCY 



HUMAN RESOURCES 

O.C. Williams V. Human Resources 

Ronald Terry Brown v. Human Resources 

Dennis K. King v. Human Resources 

Cathy Harris, A/K/A Cathy D. Grubb v. Human Resources 

Raymond L. Griffin v. Human Resources 

O.C. Williams v. Human Resources 

Michael L. Ray v. Human Resources 

Randy Chambliss v. Human Resources 

Melvin White v. Human Resources 

Joseph R. Kavaliauskas Jr. v. Human Resources 

Larry D. Bcyd v. Human Resources 

Jefferson D. Bcylen v. Human Resources 

Jeffery D. Williams v. Human Resources 

Jerry L. Summers v. Human Resources 

Samuel E. Massenbeig Jr. v. Human Resources 

William A. Dixon v. Human Resources 

Gregory L. Washington v. Human Resources 

Edwin Clarke v. Human Resources 

Dw^ne Allen v. Human Resources 

Edwin Ivester v. Human Resources 

Connie F. Epps, Otis Junior Epps v. Human Resources 

Tyrone Aiken v. Human Resources 

Everett M. Eaton v. Human Resources 

Edward E. Brandon v. Human Resources 

Darrell W Russell v. Human Resources 

John Henry Byid v. Human Resources 

Michelle D. Mobley v. Human Resources 

Gus W. Long Jr. v. Human Resources 

Robert E. Watson v. Human Resources 

Byron Christopher Wdliams v. Human Resources 

James W. Bell v. Human Resources 

Charles W. Stall Jn v. Human Resources 

Eric Stanley Stokes v. Human Resources 

Clayton L. Littleton v. Human Resources 

Frank E. Johnson v. Human Resources 

David Rollins v. Human Resources 

Willie Sam Brown v. Human Resources 

Lyndell Greene v. Human Resources 

Charles Swann v. Human Resources 

Joe B. Reece v. Human Resources 

Michael Anthor^ Dean v. Human Resources 

Gregory W Alford v. Human Resources 

Leroy Snuggs v. Human Resources 

James R Miller III v. Human Resources 

Herbert H. F^Mdham v. Human Resources 

Jack Dulq v. Human Resources 

Jesse B. Williams v. Human Resources 

Larry L. Crowdcr v. Human Resources 

Carlos Bernard Davis v. Human Resources 

Ocie C. Williams v. Human Resources 

Terrance Freeman v. Human Resources 

Flcyd Excell Staffond v. Human Resources 

Timothy Brian EUer v. Human Resources 

Charles S. P^rrer v. Human Resources 

Ronald H. Lockli^ v. Human Resources 

Rene Tliomas Riltenhouse v. Human Resources 

Thomas Edward Williamson v. Human Resources 

Roy Chester Robinson v. Human Resources 

Lynwood McClinton v. Human Resources 

Timothy Scott Long v. Human Resources 

David W Williams v. Human Resources 

William E. Ingram v. Human Resources 



Consolidated cases. 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



91 CSE 0036*= 


Morgan 


03/30/93 


91 CSE 0249 


Morgan 


05/17/93 


91 CSE 1122 


Morgan 


07/28/93 


91 CSE 1131 


Morgan 


08/24/93 


91 CSE 1148 


Morgan 


08/24/93 


91 CSE 1158*= 


Moi^an 


03/30/93 


91 CSE 1173 


Morgan 


05/17/93 


91 CSE 1187 


Morgan 


04/28/93 


91 CSE 1192 


Morgan 


05/17/93 


91 CSE 1204 


Morgan 


07/29/93 


91 CSE 1214 


Morgan 


08/24/93 


91 CSE 1217 


Morgan 


05/17/93 


91 CSE 1231 


Morgan 


04/28/93 


91 CSE 1234 


Morgan 


07/28/93 


91 CSE 1249 


Morgan 


05/17/93 


91 CSE 1277 


Morrison 


03/04/93 


92 CSE 0075 


Morgan 


04/01/93 


92 CSE 0129 


Morgan 


05/17/93 


92 CSE 0196 


Morgan 


03/31/93 


92 CSE 0268 


Nesnow 


03/30/93 


92 CSE 1182 


Reilly 


07/22/93 


92 CSE 1217 


Gray 


06/17/93 


92 CSE 1221 


Reilly 


07/27/93 


92 CSE 1237 


Gray 


04/16/93 


92 CSE 1249 


Becton 


04/20/93 


92 CSE 1250 


Reilly 


06/04/93 


92 CSE 1256 


Nesnow 


04/15/93 


92 CSE 1263 


Gray 


08/16/93 


92 CSE 1265 


Reilly 


05/06/93 


92 CSE 1270 


Nesnow 


04/26/93 


92 CSE 1311 


Nesnow 


05/10/93 


92 CSE 1313 


Mann 


07/06/93 


92 CSE 13 IS*' 


Reilly 


03/25/93 


92 CSE 1317 


Morrison 


09/02/93 


92 CSE 1326 


Reilly 


08/16/93 


92 CSE 1334 


Morrison 


05/06/93 


92 CSE 1338 


Morrison 


09/15/93 


92 CSE 1346 


Nesnow 


04/16/93 


92 CSE 1347 


West 


09/16/93 


92 CSE 1355 


Mann 


10/12/93 


92 CSE 1356 


Morrison 


08/13/93 


92 CSE 1358 


Gray 


10/18/93 


92 CSE 1360 


Morrison 


04/15/93 


92 CSE 1361 


Gray 


04/16/93 


92 CSE 1362 


Nesnow 


07/19/93 


92 CSE 1374 


Gray 


07/16/93 


92 CSE 1389 


Nesnow 


10/12/93 


92 CSE 1396 


Reilly 


04/15/93 


92 CSE 1404 


Reilly 


04/15/93 


92 CSE 1405 


Mann 


06/25/93 


92 CSE 1411 


Mann 


06/07/93 


92 CSE 1412 


Reilly 


08/31/93 


92 CSE 1414 


Reilly 


04/20/93 


92 CSE 1416 


Mann 


04/15/93 


92 CSE 1418 


Nesnow 


04/20/93 


92 CSE 1421 


Nesnow 


04/20/93 


92 CSE 1422 


Reilly 


04/20/93 


92 CSE 1423 


Reilly 


04/15/93 


92 CSE 1424 


Reilly 


09/15/93 


92 CSE 1445 


Becton 


06/29/93 


92 CSE 1448 


Nesnow 


07/19/93 


92 CSE 1450 


Reilly 


04/15/93 



PUBLISHED DECISION 
REGISTER CITATION 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1492 



CONTESTED CASE DECISIONS 



AGENCY 



Harold R. Pledger v. Human Resources 
Carl Beard v. Human Resources 
Henry Alston Jr. v. Human Resources 
Michael W. Bentley v. Human Resources 
Dale Robert Stuhre v. Human Resources 
James T. Carter Jr. v. Human Resources 
Tommy Malonc v. Human Resources 
James C. Dixon Jr. v. Human Resources 
Timothy R. Currence v. Human Resources 
Wardell Walker v. Human Resources 
Wallace M. Cooper v. Human Resources 
Jan-'is N. Price v. Human Resources 
Thomas L. Yates v. Human Resources 
Robert E. Tarlton Sr v. Human Resources 
Rodney DevanJ demons v. Human Resources 
James A. Coleman v. Human Resources 
Lee Richand Jones v. Human Resources 
Romeo F Skapple v. Human Resources 
Terrial W Mayberry v. Human Resources 
Jeffrey L. Garrstt v. Human Resources 
Edward Kirk v. Human Resources 
Wdliam C. Hubbard v. Human Resources 
William Michael Przytysz v. Human Resources 
Eduard Filch v. Human Resources 
Da\id Robinette v. Human Resourc^es 
Kit C. Elmore v. Human Resources 
Brian C- Gilmore v. Human Resources 
Philip S, Piercy v. Human Resources 
Anthony McLaughlin w Human Resources 
Johnny W. Cooke v. Human Resources 
Roland L. Essaff v. Human Resources 
Isaac Maxwell v. Human Resources 
Donald J. Ray v. Human Resources 
Barbara A. Chaperon v. Human Resources 
Charles Wayne Pierce v. Human Resources 
Donna G. Knotts v. Human Resources 
Robert Jerome Sutton v. Human Resources 
Donald R. Williams v. Human Resources 
McKinlt^ Clybum V. Human Resources 
Henry L. Taylor v. Human Resources 
Tony Thorpe v. Human Resources 
Jeffery D. W^dliams v. Human Resources 
Ronald Sowell v. Human Resources 
Billy Smith v. Human Resourc-es 
Anthony Curry v. Human Resources 
John G. Williams v. Human Resources 
Larry W. Golden v. Human Resources 
William J, Carter v. Human Resources 
Mark W. Dean v. Human Resources 
Tyrone Thomas v. Human Resources 
Rilton E. May v. Human Resources 
Joe K. Martin v. Human Resources 
Eric Stanley Slokes v. Human Resources 
Larry Thompson v. Human Resources 
Billie J. Smith v. Human Resources 
Patrick Flcyd v. Human Resources 
Dennis W. Nolan v. Human Resources 
Eric L. Garland v. Human Resources 
Ira Alston Jr. v. Human Resources 
Elvis Bernard Telfair v. Human Resources 
Ronald G. Bolden v. Human Resources 
Mar\in Holley v. Human Resources 
Eddie Short v. Human Resourc'es 
Michael Tywan Mar^h v. Human Resources 
Leroy Jones v. Human Resources 
Antonio M. Townsend \- Human Resources 
Kevin J. Close v. Human Resources 
Thadius Bonapart v. Human Resources 



CASE 




DATE OF PUBLISHED DECISION 


NUMBER 


M4 


DECISION REGISTER CITATION 


92 CSE 


1455 


Morrison 


05/20/93 


92CSE 


1459 


Reilly 


09/08/93 


92 CSE 


1460 


Bccton 


06/29/93 


92 CSE 


1512 


Nesnow 


06/09/93 


92 CSE 


1516 


Reilly 


05/11/93 


92 CSE 1517 


Mann 


08/31/93 


92 CSE 


1520 


Mann 


05/07/93 


92 CSE 1522 


Bee Ion 


05/11/93 


92 CSE 


1523 


Reilly 


09/09/93 


92 CSE 


1524 


Reilly 


10/12/93 


92 CSE 


1527 


Reilly 


05/11/93 


92 CSE 


1531 


Morrison 


05/12/93 


92 CSE 


1535 


Gray 


05/10/93 


92 CSE 


1536 


Gray 


05/17/93 


92 CSE 


1539 


Gray 


05/10/93 


92 CSE 


1540 


Reilly 


05/11/93 


92 CSE 1541 


Reilly 


09/08/93 


92 CSE 


1545 


Gray 


04/26/93 


92 CSE 


1546 


Reilly 


10/12/93 


92 CSE 1557 


Gray 


04/22/93 


92 CSE 


1560 


Gray 


06/29/93 


92 CSE 


1562 


Mann 


05/12/93 


92 CSE 


1565 


Bee ton 


07/23/93 


92 CSE 


1572 


Reilly 


05/11/93 


92 CSE 


1573 


Mann 


07/14/93 


92 CSE 


1575 


Gray 


07/16/93 


92 CSE 


1576 


Gray 


04/26/93 


92 CSE 1577 


Gray 


07/16/93 


92 CSE 


1582 


Gray 


06/29/93 


92 CSE 


1585 


Bee Ion 


05/11/93 


92 CSE 


1588 


Morrison 


07/26/93 


92 CSE 


1589 


Reilly 


04/26/93 


92 CSE 


1592 


Mann 


05/19/93 


92 CSE 


1593 


Mann 


10/13/93 


92 CSE 


1596 


Morrison 


07/14/93 


92 CSE 


1611 


Morrison 


07/16/93 


92 CSE 


1618 


Chess 


10/12/93 


92 CSE 


1622 


Nesnow 


08/04/93 


92 CSE 


1623 


Morrison 


05/20/93 


92 CSE 


1624 


Mann 


09/15/93 


92 CSE 


1625 


Chess 


07/15/93 


92 CSE 


1626 


Mann 


05/19/93 


92 CSE 


1627 


Reilly 


07/19/93 


92 CSE 


1629 


Reilly 


03/25/93 


92 CSE 


1631 


Reilly 


03/25/93 


92 CSE 


1632 


Mann 


08/10/93 


92 CSE 1633 


Reilly 


03/25/93 


92 CSE 


1637 


Nesnow 


05/19/93 


92 CSE 


1638 


Reilly 


07/15/93 


92 CSE 


1640 


Mann 


07/22/93 


92 CSE 


1642 


Morgan 


07/29/93 


92 CSE 1650 


Reilly 


09/10/93 


92 CSE 


1652*' 


Reilly 


03/25/93 


92 CSE 


1655 


Reilly 


07/22/93 


92 CSE 


1656 


Gray 


07/23/93 


92 CSE 


1653 


Reilly 


05/20/93 


92 CSE 


1670 


Morrison 


06/25/93 


92 CSE 


1671 


Mann 


07/22/93 


92 CSE 


1703 


Beeton 


05/16/93 


92 CSE 


1704 


Reilly 


09/15/93 


92 CSE 


1706 


Mann 


06/25/93 


92 CSE 


1713 


Mann 


06/08/93 


92 CSE 


1714 


Wesl 


07/15/93 


92 CSE 


1716 


Gray 


06/17/93 


92 CSE 


1718 


Gray 


06/17/93 


92 CSE 


1721 


Chess 


08/30/93 


92 CSE 


1727 


Chess 


08/30/93 


92 CSE 


1740 


Chess 


09/21/93 



1493 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



CONTESTED CASE DECISIONS 



AGENCY 



Joseph Eric Lewis v. Human Resources 

Ronald Dean Lowery v. Human Resources 

Tamera S. Hatfield v. Human Resources 

James E. Blakney v. Human Resources 

Oswinn Blue v. Human Resources 

Kelvin D. Jackson v. Human Resources 

Linwood Slaton v. Human Resources 

Anthony Watson v. Human Resources 

Eugene Polk v. Human Resources 

Glenda K. HoUifield v. Human Resources 

Kenneth W. Williams v. Human Resources 

Charles Thompson Jr. v. Human Resources 

Barbara W. Catlett v. Human Resources 

Laurel Langford v. Human Resources 

Ida Diane Davis v. Human Resources 

Hatsuko Klein v. Human Resources 

Karen MuUins Martin v. Human Resources 

Ora Lee Brinkley v. David T. Flaherty. Secretary of Human Resources 

Mary McDuffie v. Human Resources Child Development 

Leon Barhee v. Human Resources 

Carrolton of Dunn. Inc. v. Human Resources 

Dialysis Care of North Carolina, Inc., d/b/a Dialysis Care of 
Cumberland County v. Human Resources, Division of Facility 
Services, Certificate of Need Section, and Bio-Medical 
Applications of Fayetteville d/b/a Fayetteville Kidney Center, 
Webb-Loha'ichan-Melton Rentals, Bio-Medical Applications 
of North Carolina, Inc., d/b/a BMA of Raeford and Webb- 
Lohavichan Rentals 

Dialysis Care of Nortii Carolina, Inc., d/b/a Dialysis Care of 
Cumberland County v. Human Resources, Division of Facility 
Services, Certificate of Need Section, and Bio-Medical 
Applications of Fayetteville d/b/a Fayetteville Kidn^ Center, 
Webb-Loha/ichan-Melton Rentals. Bio-Medical Applications 
of North Carolina, Inc., d/b/a BMA of Raeford and Webb- 
Lohavichan Rentals 

Bio-Medical Applications of North Carolina. Inc., d/b/a BMA 
of Raeford, Webb-Loha/ichan-Melton Rentals. Bio-Medical 
Applications of North Carolina, Inc., d/b/a BMA of Fayetteville 
d/b/a Fayetteville Kidney Center and Webb-Loha'ichan Rentals 
v. Human Resources, Division of Facility Services, Certificate of 
Need Section and Dialysis Care of North Carolina, Inc., d/b/a 
Dialysis Care of Hoke County 

Renal Care of Rocky Mount, Inc. v. Human Resources, Division of 
Facility Services, Certificate of Need Section, and Bio-Medical 
Applications of North Carolina, Inc., d/b/a BMA of Tarboro, 
Rocky Mount Nephrology Associates, Inc., Bio-Medical 
Applications of North Carolina, Inc., d/b/a BMA of Rocky Mount 
d/b/a Rocky Mount Kidn^ Center, and Rocky Mount Kidney Center 
Associates 

James H. Hunt Jr. v. Division of Medical Assistance 

Barbara Jones v. Human Resources 

Joyce R Williams v. Human Resources 

Snoopy Day Care. Diane Hamty v. Child Day Care Licensing 

Cynthia Reed v. Human Resources 

The Neighborhood Center v. Human Resources 

Helm's Rest Home. Ron J. Schimpf/Edith H. Wilson v. Human Resources 

Jo Ann Kins^ v. NC Memorial Hospital Betty Hutton, Volunteer Svc. 

Amy Clara Williamson v. NC Mem Hosp Betty Hutton, Volunteer Svc. 

Betty Butler v. Human Resources 

Wayne Sanders and Brcnda Sanders v. Human Resources 

Brittha-'en. Inc. v. Human Resources & Valdese Nursing Home, Inc. 

Samuel Benson v. Office of Admin. Hearings for Medicaid 

James W. McCall, Alice V. McCall v. Human Resources 

Vemice Whisnant v. Human Resources 

Cabarrus Cty Dept. of Social Svcs. v. Human Resources 

Hannah F. Tonkel v. Human Resources 

Fannie Lewis v. Human Resources 

Human Resources, Div. of Child Development v. Susan Amalo 



CASE 




DATE OF 


NUMBER 


ALJ 


DECISION 


92 CSE 1748 


Bee ton 


08/02/93 


92 CSE 1771 


West 


07/15/93 


92 CSE 1772 


Chess 


08/30/93 


92 CSE 1779 


Nesnow 


05/13/93 


93 CSE 0073 


Chess 


08/03/93 


93 CSE 0221 


West 


08/04/93 


93 CSE 0250 


Nesnow 


08/13/93 


93 CSE 0396 


Nesnow 


08/04/93 


93 CSE 0437 


Chess 


08/11/93 


93 CSE 0545 


West 


10/11/93 


93 CSE 0590 


ReiUy 


10/18/93 


93 CSE 0696 


Morrison 


09/23/93 


92 DCS 0577 


West 


03/15/93 


92 DCS 1181 


Gray 


05/04/93 


92 DCS 1200 


Gray 


03/29/93 


92 DCS 1271 


Reilly 


05/05/93 


92 DCS 1783 


West 


08/04/93 


92 DHR 0608 


Chess 


08/27/93 


93DHR 0651 


Bee ton 


09/10/93 


92 DHR 0658 


Morrison 


04/30/93 


92 DHR 1101 


Morgan 


07/26/93 


92 DHR 1109** 


Morgan 


06/22/93 



PUBLISHED DECISION 
REGISTER CITATION 



92DHRI110*^ Morgan 06/22/93 



92 DHR 1116** Moig;an 06/22/93 



92 DHR 1120 



Gray 



06/18/93 



8:5 NCR 441 



.:4 NCR 392 
:8 NCR 687 



8:8 NCR 687 



8:8 NCR 687 



8:8 NCR 687 



92 DHR 


1145 


Bee ton 


05/13/93 


8:5 NCR 443 


92 DHR 


1192 


Nesnow 


04/02/93 


8:3 NCR 313 


92 DHR 


1275 


Gray 


03/15/93 




92 DHR 


1320 


Morgan 


05/21/93 




92 DHR 


1329 


Chess 


05/10/93 




92 DHR 


1375 


Chess 


08/02/93 




92 DHR 


1604 


Reilly 


05/10/93 




92 DHR 


1612 


Chess 


03/08/93 




92 DHR 


1613 


Chess 


03/08/93 




92 DHR 


1614 


Chess 


03/09/93 




92 DHR 


1699 


Reilly 


06/07/93 


8:7 NCR 632 


92 DHR 


1785 


Gray 


09/17/93 




93 DHR 0010 


Bee ton 


03/11/93 




93 DHR 0102 


Morgan 


10/05/93 




93 DHR 0332 


Morgan 


09/23/93 




93 DHR 0373 


Morgan 


07/20/93 




93 DHR 0378 


Nesnow 


09/10/93 




93 DHR 0379 


Gray 


06/28/93 




93 DHR 0418 


Morgan 


08/26/93 





8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1494 



CONTESTED CASE DECISIONS 



AGENCY 



Katie Kelly v. Human Resources 

Christopher Durrer, Wilson Memorial Hospital v. Human Resources 

Darryl A. Richardson v. Human Resources 

Home Health Prof.. Barbara P. Bradsher. Admin v. Human Resources 

Sandra Gail Wilson v. Child Abuse/7^ cglecl, Div. of Child Development 

INSURANCE 

Carolyn M. Hair v. St Erapicyees Comprehensive Major Medical 
Scotland Memorial Hospital, Mary Home Odom v. Bd. /Trustees// 
St. of N.C. Teachers' & St. Emp. Comp. Major Medical Plan, and 
David G. Devries, as Exec. Admin, of the N.C. Teachers' & St. Emp. 
Comp. Major Medical Plan 
Phyllis C. Harris v. Teachers' &. St. Emp. Comp. Major Med. Plan 

JUSTICE 

Philip B. Gates v. Justice, Attorney General's Office 

Jennii^ Michael Bostic v. Sheriffs* Ed. & Tranir^ Stds. Cotmn. 

Colin Carlisle Mayers v. Sheriffs' Ed. &. Training Stds. Comm. 

Jermings Michael Bostic v. Sheriffs' Ed. & Tranir^ Stds. Comm. 

Michael Charles Ker^hner v. Criminal Justice Ed & Training Stds Comm 

George Wilton Hawkins v. Criminal Justice Ed. & Training Stds. Comm. 

Marilyn Jean Brilt v. Criminal Justice Ed. &. Training Stds. Comm. 

Tim McCoy Deck v. Criminal Justice Ed. &. Training Stds. Comm. 

Richard Zander Frink v. Criminal Justice Ed. &. Tranit^ Stds. Comm. 

Sherri Rrguson Revis v. Sheriffs' Ed, & Training Stds. Comm. 

Mark TTiomas v. Sheriffs' Ed. &. Training Standards Commission 

George Wilton Hawkins v. Sheriffs" Ed. &. Trainir^ Stds. Comm. 

Loimie Allen Fox v. Sheriffs' Ed. &. Training Standards Commission 

Alarm Systems Licensing Bd. v. Eric Hoover 

AlatTTi Systems Licensing Bd. v. Vivian Darlene Gailher 

Rebecca W. Stevenson v. Criminal Justice Ed. &, Trainii^ Stds. Comm. 

Llcyd Harrison Bryant Jr. v. Criminal Justice Ed & Trainir^ Stds Comm 

William B. Lipscomb v. Private Protective Services Board 

Private Protective Svcs. Bd. v. Fred D. Rector 

Private Protective Svcs. Bd. v. Alan D. Simpson 

William M. Medlin v. Sheriffs' Ed. & Trainir^ Stds. Comm. 

Carl Michael O'Byme v. AlarTn Systems Licensing Board 

LABOR 

Greensboro Golf Center, Inc. v. Labor 
Ronald Dennis Hunt v. Labor 
Jeffrey M. McKinni^ v. Labor 

MORTUARY SCIENCE 



CASE 




DATE OF 


NUMBER 


AL.I 


DECISION 


93 DHR 0441 


Chess 


07/26/93 


93 DHR 0566 


Chess 


09/17/93 


93 DHR 0679 


Bee ton 


09/30/93 


93 DHR 0737 


Chess 


09/23/93 


93 DHR 0782 


Nesnow 


09/09/93 



PUBLISHED DECISION 
REGISTER CITATION 



92 INS 1464 
92 INS 1791 



93 INS 0197 



Chess 
Reilly 



Nesnow 



03/10/93 
08/19/93 



07/29/93 



92 DOL 0204 Nesnow 04/15/93 

92DOL1319 MoT^an 06/17/93 

92 DOL 1333 Morrison 06/21/93 



I 



90 DOJ 0353 


Morgan 


08/30/93 


8:13 NCR 1281 


92 DOJ 0656*' 


West 


06/22/93 




92 DOJ 0761 


Morrison 


05/10/93 




92 DOJ 0829*~ 


West 


06/22/93 




92 DOJ 0869 


Morgan 


08/11/93 




92 DOJ 1081*' 


Morgan 


07/09/93 




92 DOJ 1088 


Morrison 


03/16/93 




92 DOJ 1367 


Chess 


04/01/93 




92 DOJ 1465 


Nesnow 


05/28/93 




92 DOJ 1756 


Gray 


03/23/93 




93 DOJ 0151 


West 


04/21/93 




93 DOJ 0156*' 


Morgan 


07/09/93 




93 DOJ 0196 


Morrison 


08/09/93 




93 DOJ 0201 


Bee ton 


07/12/93 




93 DOJ 0202 


Chess 


05/10/93 




93 DOJ 0357 


Morrison 


09/13/93 




93 DOJ 0377 


Reilly 


08/31/93 




93 DOJ 0458 


Morrison 


06/01/93 




93 DOJ 0479 


Mann 


08/19/93 




93 DOJ 0480 


West 


07/21/93 




93 DOJ 0569 


Chess 


10/06/93 




93 DOJ 0844 


Nesnow 


09/08/93 


8:13 NCR 1300 



I 



Board of Mortuary Science v. Triangle Funeral Chapel, Inc. 
PUBLIC INSTRUCTION 



92 BMS 1169 Reilly 



04/29/93 



8:4 NCR 396 



Frances F. Davis. Parent of Joseph E. Davis v. Public Instruction 
Donna Marie Snyder v. Public Instruction 

STATE PERSONNEL 



93 EDC 0628 Mann 07/29/93 

93EDC0731 Nesnow 09/16/93 



Frances K. E^te v. Transportation 

Lawrence D. Wilkie, Jerry R. Evans. Jules R. Hancart. 

James H. Johnson, James D. Fishel v. Justice 
Lawrence D. Wilkie, Jerry R. Evans. Jules R. Hancart. 

James H. Johnson, James D. Fishel v. Justice 
Lawrence D Wilkie, Jerry R. Evans. Jules R. Hancart, 

James H. Johnson, James D. Fishel v. Justice 
Lawrence D. Wilkie, Jeny R. Evans, Jules R. Hancart, 

James H. Johnson, James D, Fishel v. Justice 
Lawrence D. Wilkie, Jerry R. Evans. Jules R. Hancart, 

James H. Johnson, James D. Fishel v. Justice 



88 OSP 0340 Morrison 05/03/93 

90 OSP 1064=*^ Mann 05/04/93 

90 OSP 1065** Mann 05/04/93 

90OSP1066*' Mann 05/04/93 

90 OSP 1067** Mann 05/04/93 

90 OSP 1068=^ Mann 05/04/93 



t 



1495 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



CONTESTED CASE DECISIONS 



AGENCY 



Connie B. Lee v. Justice 

Bemie B. Kellly v. Correction 

Brenda G. Mitchell v. Correction 

Walton M. Pitt man v. Correction 

Adolph Alexander Justice Jr. v. Motor Vehicles, Transportetion 

Clayton Brewer v. North Carolina State University 

Sherman Dayc v. Transportation 

Donnie M. While v. Correction 

Gregory Samuel I^rker v. Environment. Health, & Natural Resources 

Renee E. Shepherd v. Winston-Salem State University 

Eva Dockery v. Human Resources 

Lee P. Crosby v. Michael Kelly, William Meyer and EHR 

William Marshall Bcyd Jr. v. County Commissioners of Hyde & 

Certain Board of Health Members 
Gregory Samuel Parker v. Environment, Health. &. Natural Resources 
Willie Granville Bailt^ v. Winston-Salem State University 
Mattie W. Smith v. State Agricultural and Technical University 
Julia Spinks v. Environment. Health, &. Natural Resources 
James B. Price v. Transportation 
L Cary Nailling v. UNC-CH 
Deborah Barber v. Correction 
Laveme B. Hill v. Transportation 
Jimmy D. Wilkins v. Transportation 

Sarah W. Briu v. Human Resources, C.A. Dillon School, CPS 
Charles Robinson v. Revenue 

Anna L. Spencer v. Mecklenburg County Area Mental Health 
Herman James Goldstein v. UNC-Chapel Hill et al. 
Ronnie H. Mozingo v. Correction 
GUnda C. Smith v. Wildlife Resources Commission 
Cindy G. Bartlett v. Correction 

William Kenneth Smith Jr. v. Broughton Hospital (Human Resources) 
Larry O. Nobles v. Human Resources 

Beatrice Wheless v. Lise M. Miller. University F^roll Off., NC St. Univ. 
Tracey Hall v. N.C. Central U, Off. of Scholarship &. Student Aid 
Sondra Williams v. Winston-Salem State University 
Willie Thomas Hope v. Transportation 
David Scales v. Correction 

Suzanne Ransley Hill v. Environment, Health, & Nat. Res. 
Herman James Goldstein v. UNC-Chapel Hill et al. 
Charles M. Blackweider v. Concction 

Beatrice Wheless v. Lise M. Miller, University Payroll Off.. NC St. Univ. 
John B. Sauls v. Wake County Health Department 
Patii G. Newsome v. Transportation 

Nancy McAllister v. Camden County Department of Social Services 
Gilbert Jaeger v. Wake County Alcoholism Treatment Center 
Joseph Henry Bishop v. Environment, Health, Si. Natural Res. 
Glenn D. Fuqua v. Rockingham County Board of Social Services 
Willie L. Hudson v. Correction 

Brenda K. Campbell v. Employment Security Commission 
Christie L. Guthrie v. Environment, Health, &. Natural Resources 
Sharon Reavis v. Crime Control & Public Safety 
James B. Price v. Transportation 
Jerry L. Jones v. N.C.S.U. Physical Plant 

Mattie W. Smith v. State Agricultural and Technical University 
Roland W Holden v. University of North Carolina at Chapel Hill 
Betty Bradsher v. UNC-CH 

Anthoriy M. Little v. Human Resources, John Umstead Hospital 
Jamal Al Bakkat-Morris v. Glenn Sexton (DSS) 
Rebecca Beauchesne v. University of North Carolina at Chapel Hill 
Brenda Kay Barnes v. Human Resources 
Larry G. Riddle v. Correction, Division of Prisons 
Slevie E. Dunn v. Polk Youth Center 

Bufoid D. Vieregge Jr. v. N.C. Slate University, University Dinir^ 
Dorothy Ann Harris v. Correction 

Brenda B. Miles v. University of North Carolina Chapel Hill 
Deborah J. Whitfield v. Caswell Center 
Karen Canter v. Appalachian State University 
Terry Steve Brown v. Iredell County Health Department 



CASE 




DATE OF 


PUBLISHED DECISION 


NUMBER 


ALJ 


DECISION 


REGISTER CITATION 


91 OSPOOU 


Morgan 


10/05/93 


8:15 NCR 1498 


91 OSP0344 


Morrison 


05/27/93 




91 OSP 0625 


West 


03/08/93 


8;1 NCR 75 


91 OSP 0805 


Moi^an 


10/06/93 




91 OSP 0860 


Chess 


07/19/93 




91 OSP 0941 


West 


04/02/93 


8:3 NCR 306 


91 OSP 0951 


West 


05/07/93 




91 OSP 1236 


Morgan 


04/05/93 




91 OSP 1344*> 


Chess 


05/20/93 




91 OSP 1391 


Morgan 


04/28/93 




92 OSP 0010 


Chess 


05/03/93 




92 OSP 0056 


Gray 


06/07/93 




92 OSP 0090 


Gray 


08/25/93 




92 OSP 0188*> 


Chess 


05/20/93 




92 OSP 0285 


Morrison 


03/10/93 




92 OSP 0298*^ 


Reilly 


09/14/93 




92 OSP 0313 


Beclon 


04/12/93 


8:4 NCR 382 


92 OSP 0375 


Gray 


04/13/93 




92 OSP 0394 


Beclon 


04/20/93 




92 OSP 0396 


Chess 


03/04/93 




92 OSP 0431*1 


West 


03/08/93 




92 OSP 0432*" 


West 


03/08/93 




92 OSP 0455 


West 


05/26/93 


8:6 NCR 484 


92 OSP 0553 


Morgan 


07/21/93 




92 OSP 0584 


Bee ton 


08/16/93 




92 OSP 0634 


Morrison 


05/04/93 




92 OSP 0644 


Mann 


10/11/93 




92 OSP 0653 


Morrison 


03/12/93 




92 OSP 0671 


Morgan 


06/08/93 




92 OSP 0684 


Beclon 


05/10/93 




92 OSP 0732 


Mann 


04/23/93 




92 OSP 0744*"' 


Morgan 


07/16/93 




92 OSP 0815 


Morgan 


09/16/93 




92 OSP 0847 


Morrison 


08/06/93 




92 OSP 0947 


Morgan 


03/23/93 




92 OSP 0989 


Chess 


06/24/93 




92 OSP 0992 


Rcilly 


03/18/93 


8:2 NCR 224 


92 OSP 1047 


Morrison 


05/04/93 




92 OSP 1082 


Morrison 


10/15/93 


8:15 NCR 1500 


92 OSP 1 124*"' 


Morgan 


07/16/93 




92 OSP 1142 


Reilly 


03/08/93 


8:1 NCR 88 


92 OSP 1180 


Beclon 


09/22/93 


8:14 NCR 1346 


92 OSP 1185 


Chess 


09/07/93 




92 OSP 1204 


Reilly 


05/10/93 




92 OSP 1243 


Reilly 


03/05/93 




92 OSP 1318 


Morrison 


08/03/93 




92 OSP 1468 


Beclon 


05/26/93 




92 OSP 1505 


Morrison 


03/17/93 




92 OSP 1555 


Beclon 


05/31/93 




92 OSP 1606 


Morrison 


08/19/93 


8:12 NCR 1163 


92 OSP 1657 


Mann 


03/19/93 




92 OSP 1661 


Chess 


07/06/93 




92 OSP 1691*'- 


Reilly 


09/14/93 




92 OSP 1715 


Beclon 


08/30/93 


8:13 NCR 1292 


92 OSP 1733 


Beclon 


03/30/93 




92 OSP 1734 


Beclon 


09/01/93 




92 OSP 1741 


Beclon 


03/24/93 




92 OSP 1767 


Beclon 


10/01/93 




92 OSP 1768 


Morrison 


03/17/93 




92 OSP 1774 


Gray 


04/26/93 




92 OSP 1789 


Beclon 


04/19/93 




92 OSP 1796 


Morrison 


05/27/93 




93 OSP 0013 


Morrison 


09/15/93 




93 OSP 0033 


Morrison 


09/10/93 




93 OSP 0064 


West 


09/20/93 




93 OSP 0079 


Reilly 


06/15/93 




93 OSP 0101 


Morgan 


08/06/93 





8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1496 



P UWHHHMMUJIWlL ' JMIPIi g PytHWinnBgM 



CONTESTED CASE DECISIONS 



AGENCY 



Barbara A- Johnson v. Human Resources 

Carrie P. Smith v. County of Stanly 

George W. Allen v. Human Resources, Corrcction. Agri &. EHNR 

William G. Fisher v. St Bd of Ed, Albermarle City Schools & Bd of Ed 

Grace Jean Washington v. Caswell Center 

Clifton E. Simmons v. Correction 

Willie L. James v. Caswell Center 

Irvir^ S. Rodgers v. C.A. Dillon. Division of Youth Services 

Richard E. Howell v. Correction. Wayne Correctional Center 

Bnan Dale Bamhatdt v. State Highway F^tnol 

FR. "Don" Bowen v. Human Resources 

Michael L. Pegram v. Correction 

Jerry D. Doss Sr. v. Correction 

Debbie Renee Robinson v. Correction 

Linda R. Wharton v. N.C. A & T Univereity 

Michael L. Pegram v. Correction 

Hubert L. Holmes v. Transportation 

Timothy E. Blevins v. UNC A/K/A Western Carolina Umvereity 

Xantippe Blackwell v. Human Resources, Murdoch Center 

Wayne Bradley Johnson v. Slate Computir^ Center 

Harold Kovolenko v. Lyim C. Phillips. Director of Prisons 

Daniel Thomas Wheeler, Kye Lee Wheeler v. Caldwell County 

Department of Social Services 
Terry Johnson v. Correction 
Kathleen E. Conran v. New Bern Police Dept., City of New Bern; and 

City of New Bern Police Civil Service Board 
Dana Phillips v. Administrative Office of the Courts 
Terrv P Chappell v. Correction 



CASE 




DATE OF PUBLISHED DECISION 


NUMBER 


AL,T 


DECISION REGISTER CITATION 


93 OSP 0103 


Morrison 


03/17/93 


93 OSP 0109 


Becton 


04/01/93 


93 OSP 01 11 


Reilly 


04/16/93 


93 OSP 0134 


Becton 


04/20/93 


93 OSP 0153 


Morgan 


06/03/93 


93 OSP 0159 


Morrison 


04/21/93 


93 OSP 0171 


Morgan 


05/27/93 


93 OSP 0177 


West 


04/21/93 


93 OSP 0245 


Gray 


08/25/93 


93 OSP 0251 


Reilly 


07/27/93 


93 OSP 0253 


Morgan 


08/06/93 


93 OSP 0275»* 


Reilly 


06/28/93 


93 OSP 0287 


Gray 


05/17/93 


93 OSP 0383 


Nesnow 


06/07/93 


93 OSP 0456 


Chess 


09/22/93 


93 OSP 0472** 


Reilly 


06/28/93 


93 OSP 0572 


Reilly 


08/17/93 


93 OSP 0604 


Morgan 


09/29/93 


93 OSP 0632 


Reilly 


09/01/93 


93 OSP 0694 


Chess 


10/11/93 


93 OSP 0697 


Nesnow 


09/08/93 


93 OSP 0752 


Nesnow 


09/16/93 


93 OSP 0757 


Gray 


10/06/93 


93 OSP 0797 


Morrison 


09/21/93 


93 OSP 0822 


West 


09/09/93 


93 OSP 0834 


Nesnow 


10/11/93 



I 



STATE TREASURER 



Juanita M. Braxton v. Bd. of Trustees/Teachers' & St Emp Ret Sys 
Herman D. Brooks v. Bd of Trustees/Teachers' & St Emp Ret Sys 
Henrieta Sandlin v. Teachers" &, Slate Emp Comp Major Medical Plan 
Frances Billingsley v. Bd/Trustees/Teachers' & St. Emp. Ret. Sys. 
Dennis WiUoughty v. Bd. /Trustees/Teachers' & St. Emp. Ret. Sys. 
Mary Alyce Carmichael v. Bd/Trustees/Teachers" & St Emp Ret Sys 
W. Rex Perry v. Bd/Trustees/Teachers" & St Emp Ret Sys 
Rory Dale Swiggett v. Bd. /Trustees /N.C. Local Govtl. Emp. Ret. Sys. 



91 DST 0017 


West 


09/07/93 




9 1 DST 0566 


Grav 


04/13/93 




92 DST 0305 


Morgan 


04/12/93 




92 DST 0996 


West 


09/20/93 




92 DST 1439 


West 


09/20/93 


8:14 NCR 1356 


92 DST 1506 


Chess 


04/08/93 




93 DST 0133 


West 


08/12/93 


8:11 NCR 992 


93 DST 0198 


West 


09/28/93 


8:14 NCR 1360 



# 



TRANSPORTATION 



Yates Construction Co-, Inc. v. Transportation 
UNTVERSITY OF NORTH CAROLINA HOSPITALS 



92 DOT 1800 Mot^an 03/25/93 



Constance V. Grahain v. UNC Hospital 
Jacqueline Florence v. UNC Hospitals 



93 UNC 0269 
93 UNC 0355 



Morgan 
Becton 



07/20/93 
06/16/93 



I 



1497 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF SAMPSON 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

91 OSPOOIl 



CONNIE B. LEE 
Petitioner, 

V. 

N.C DEPARTMENT OF JUSTICE 
Respondent. 



FINAL DECISION 



On January 9, 1991 the Petitioner filed a petition in which she alleged that the Respondent had 
arbitrarily and capriciously reduced the Petitioner's position of employment from a full-time capacity to a 
part-time capacity, without just cause and in contravention of constitutional due process provisions and 
reduction-in-force regulations. The Respondent's Motion to Dismiss and Respondent's Memorandum of Law 
in Support of Motion to Dismiss were filed on March 15, 1991, in which the Respondent contends that the 
Office of Administrative Hearings lacks subject matter jurisdiction to review an agency's management decision 
to change an employee's work position from "permanent full-time" to "permanent part-time" as a result of 
a reduction in appropriations by the North Carolina General Assembly since the employee was not disciplined 
for alleged just cause, was not involuntarily separated and did not allege discrimination. The Respondent 
further contends in its motion to dismiss that the Petitioner's petition fails to state a claim upon which relief 
can be granted because the Respondent's action concerning the Petitioner's employment was not a 
reduction-in-lbrce, in that the Petitioner was not separated from employment. Tlie Petitioner filed the 
Petitioner's Memorandum of Law in Opposition of Motion to Dismiss on April 10, 1991, asserting that she 
has a cognizable claim under Chapter 126 of the North Carolina General Statutes because her grievance arises 
out of her employment and constitutes a "contested case" concerning the dispute about her full-time 
employment position and salary being reduced to a part-time employment position with one-half of the salary 
which the Petitioner previously earned. 

CONCLUSIONS OF LAW 

In Batten y, N.C. Dept. of Correction , 326 N.C. 338, 389 S.E.2d 35 (1990), the Supreme Court of 
North Carolina addressed the issue of the Office of Administrative Hearings' subject matter jurisdiction in a 
contested case involving, a state employee's grievance. The Supreme Court stated: 

"TTie jurisdiction of the OAH [Office of Administrative Hearings] over the appeals of state 
employees grievances derives not from Chapter 150B, but from Chapter 126. The 
administrative hearing provisions of Article 3, Chapter 150B, do not establish the right of a 
person 'aggrieved' by agency action to OAH review of that action, but only describe the 
procedures for such review." (326 N.C. at 342-343, 389 S.E.2d at 38). 

Chapter 126 of the North Carolina General Statutes is commonly known as "The State Personnel Act." The 
high court in Batten also offered the following criteria for the determination of the propemess of the Office 
of Administrative Hearings' subject matter jurisdiction over a state employee's grievance: 

"The question whether petitioner's appeal was a 'contested case' arising under the State 
Personnel Act turns upon whether he has stated grounds recognized in that Act as meriting 
administrative review and appeal." (326 N.C. at 345, 389 S.E.2d at 40) 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1498 



wuMWfliu a ww M mBc a 



CONTESTED CASE DECISIONS 



N.C.G.S. §126-37(a) establishes that appeals involving a disciplinary action, alleged discrimination and any 
other contested case arising under Chapter 126 of the North Carolina General Statutes shall be conducted in 
the Office of Administrative Hearings, with the State Personnel Commission making a final decision in these 
cases. N.C.G.S. §126-35(a) states that no career State employee subject to the State Personnel Act shall be 
discharged, suspended or demoted for disciplinary reasons, except for just cause. Title 25, Chapter ID, 
Section .0504(a) of the North Carolina Administrative Code authorizes the concept of a reduction-in-force by 
allowing an appointing authority to separate an employee whenever it is necessary due to shortage of funds 
or work, abolishment of a position or other material change in duties or organization. 25 NCAC ID .0504(c) 
gives a permanent employee who is separated due to reduction-in-force the right to appeal to the State 
Personnel Commission for a review to assure that systematic procedures were applied. 

In the case at bar, the Petitioner's grievance fails to satisfy the criteria articulated by the Supreme 
Court of North Carolina in Batten v. N.C. Dept. of Correction , supra in order to properly establish subject 
matter jurisdiction within the province of the Office of Administrative Hearings. The allegation of the 
Respondent's improper reduction of the Petitioner's position of employment from a full-time capacity to a 
part-time capacity, although framed to be based upon appealable grounds of just cause and reduction-in-force, 
does not constitute grounds which are recognized in the State Personnel Act as meriting administrative review 
and appeal as a contested case under the jurisdiction of the Office of Administrative Hearings. 

It is readily apparent from the parties' respective pleadings and dismissal motion documents that 
subject matter jurisdiction in this contested case cannot properly be based upon the reviewability of the 
existence of just cause under N.C.G.S. §126-35, although the Petitioner argues that there was no "just cause" 
for her reduction in employment from full-time status to part-time status, because the Petitioner was not 
disciplined here through discharge, suspension or demotion in her employment. It is similarly apparent from 
these pleadings and dismissal motion documents that subject matter jurisdiction cannot correctly be premised 
upon the reviewability of the application of reduction-in-force procedures specifically under 25 NCAC ID 
.0504(c), despite the Petitioner's contention that her reduction in employment from full-time to part-time status 
contravened regulations regarding reduction-in-force. because the Petitioner was not separated from her 
employment as reduction-in-force rules contemplate. In this regard, the Petitioner has not stated grounds 
which are recognized in the State Personnel Act as meriting administrative review and appeal as a contested 
case under the jurisdiction of the Office of Administrative Hearings. 

Since the jurisdiction of the Office of Administrative Hearings over appeals of state employee 
grievances derives from the State Personnel Act as enunciated by North Carolina's high court in Batten y^ 
N.C. Dept. of Correction , supra , then the Petitioner's failure to state grounds for a contested case which are 
recognized in the State Personnel Act warrants the dismissal of the Petitioner's action due to a lack of subject 
matter jurisdiction. 

FINAL DECISION 

TTiis contested case is DISMISSED for lack of jurisdiction under N.C.G.S. §150B-36(c). 

NOTICE 

In order to appeal a final decision, the person seeking review must file a petition with the Superior 
Court of Wake County or with the superior court of the county where the person resides. The petition for 
judicial review must be filed within thirty days after the person is served with a copy of the final decision. 
N.C.G.S. §150B-46 describes the contents of the petition and requires service of the petition on all parties. 

This the 5th day of October, 1993. 



Michael Rivers Morgan 
Administrative Law Judge 



1499 8:15 NORTH CAROLINA REGISTER November 1, 1993 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 
COUNTY OF >fEW HANOVER 92 OSP 1082 



CHARLES M. BLACKWELDER 
Petitioner, 



N.C DEPARTMENT OF CORRECTION 
Respondent. 



FINAL DECISION 

DISMISSING CASE FOR 

LACK OF JURISDICTION 

N.C.G.S. § 150B-36(c) 



Upon consideration of Respondent's Motion to Dismiss Petitioner's petition for a contested case 
hearing and Petitioner's Response to Respondent's Motion, the undersigned Senior Administrative Law Judge 
determines the following: 

1. On October 1, 1990, Petitioner began employment with Respondent, the North Carolina 
Department of Correction, in a pay grade 64 position. On October 1, 1991, Petitioner and his position were 
reallocated upwards to a pay grade 66 position. 

2. On May 12, 1992, Petitioner was advised, in writing, that his employment with Respondent 
would be terminated, effective February 28, 1992, for unacceptable personal conduct. 

3. At the time of his dismissal, Petitioner had served for twelve months in a pay grade 64 
position with Respondent, and had served for five months in a pay grade 66 position with Respondent. 

4. On September 21 , 1992, Petitioner filed a petition for a contested case hearing with the Office 
of Administrative Hearings appealing his dismissal from employment with Respondent alleging that his 
dismissal was without just cause. 

5. On November 13, 1992, Respondent filed a Motion to Dismiss Petitioner's petition for lack 
of jurisdiction. The basis for Respondent's motion was that Petitioner did not have the requisite number of 
months of continuous State employment in his respective pay grades to classify him as a "permanent State 
Employee" under N.C.G.S. § 126-39 for the purpose of appealing his dismissal to the Office of Administrative 
Hearings and the State Personnel Commission. 

6. Petitioner responded to Respondent's motion, contending that his previous employment with 
Southeastern Area Mental Health, an area mental health agency, should be credited toward his "continuous 
State employment" as defined under N.C.G.S. § 126-39 for the purpose of appealing his dismissal to the 
Office of Administrative Hearings and the State Personnel Commission. 

7. Respondent filed a reply to Petitioner's response, contending that employment with an area 
mental health agency was not employment with the "State of North Carolina" for the purposes of N.C.G.S. 
§ 126-39, and therefore should not be credited toward Petitioner's "continuous State employment" in 
determining whether Petitioner was a "permanent State employee" as defined under N.C.G.S. § 126-39. 

8. In an effort to resolve whether Petitioner's prior employment with an area mental health 
agency was creditable State service for the purpose of pursuing an appeal under Chapter 126, the Senior 
Administrative Law Judge sought an advisory opinion from the State Personnel Commission as provided for 



8:15 NORTH CAROLINA REGISTER November 1, 1993 1500 



CONTESTED CASE DECISIONS 



under N.C.G.S. § 126-5(h). On October 1, 1993, the Office of State Personnel provided an Affidavit on this 
issue, which the Senior Administrative Law Judge considers to be an advisory opinion. 

9. In its Affidavit, the Office of State Personnel stated the following: 

It has been the view and practice of the Office of State Personnel that 
employment with an area mental health authority does not constitute 
employment by the State of North Carolina for the purpose of GS 126-39. 

10. As Petitioner's employment with the State of North Carolina does not meet the requirements 
of N.C.G.S. § 126-39, Petitioner is not a "permanent State employee" entitled to appeal under Chapter 126 
of the North Carolina General Statutes, and the Office of Administrative Hearings and the State Personnel 
Commission lack jurisdiction over Petitioner's contested case. 

DISCUSSION 

The North Carolina Supreme Court has recognized that N.C.G.S. § 126-37 provides the basis for 
jurisdiction over personnel appeals to the Office of Administrative Hearings and the State Personnel 
Commission brought by state employees pursuant to Chapter 126. Batten v. N.C. Dep't of Correction , 326 
N.C. 338, 343, 389 S.E.2d 35, 39 (1990). Furthermore, the North Carolina Court of Appeals has held that 
"[t]he right to appeal to an administrative agency is granted by statute, and compliance with statutory 
provisions is necessary to sustain the appeal." Lewis v^ N.C. Dep't of Human Resources , 92 N.C. App. 737, 
739, 375 S.E.2d 712, 714 (1989). 

N.C.G.S. § 126-39 provides a specific definition of those individuals who are entitled to appeal an 
agency action to the State Personnel Commission. Specifically, a "permanent State employee" who is entitled 
to appeal an agency action under Chapter 126 is defined as being a person: 

(2) in a grade 61 to grade 65 position who has been continuously 
employed by the State of North Carolina for the immediate 36 preceding 
months; 

(3) in a grade 66 to grade 70 position who has been continuously 
employed by the State of North Carolina for the immediate 48 preceding 
months; 

N.C.G.S. § 126-39 (1987).** 

It is not disputed that Petitioner was not continuously employed with Respondent for 36 months or 
more in his pay grade 64 position nor for 48 months or more in his pay grade 66 position. The issue 
presented in this case is whether Petitioner's previous employment with an area mental health authority 
constitutes "employment with the State of North Carolina" under N.C.G.S. § 126-39. 

In its Affidavit, the Office of State Personnel rendered the opinion that employment with an area 
mental health authority does not constitute employment with the State of North Carolina for the purpose of 
N.C.G.S. § 126-39. The North Carolina Court of Appeals has recently held that "'[w]here an issue of 
statutory interpretation arises, the construction adopted by those who execute and administer the law in 
question is highly relevant.' State y. Tew, 326 N.C. 732, 739, 392 S.E.2d 603, 607 (1990) (citations 

omitted)." Cauthen y^ N.C. Department of Human Resources , 112 N.C. App. , S.E.2d 

(5 October 1993). Accordingly, as the State Personnel Commission is vested with the authority to establish 
policies and rules governing the State Personnel System, see, N.C.G.S. § 126-4, its opinion as to what types 
of employment constitute employment with the State of North Carolina under N.C.G.S. § 126-39 should be 



** The remaining provisions of N.C.G.S. § 126-39 arc not set forth in this decision as those provisions are not relevant to the specific facts of this 
case. 



1501 8:15 NORTH CAROLINA REGISTER November 1, 1993 



CONTESTED CASE DECISIONS 



considered highly relevant to the determination of that issue. 

For the foregoing reasons. Petitioner's employment with an area mental health authority does not 
constitute employment with the State of North Carolina for the purpose of defining a "permanent State 
employee" under N.C.G.S. § 126-39. Petitioner's employment with Respondent in his respective pay grades 
does not meet the requirements of N.C.G.S. § 126-39 regarding the number of months of necessary 
continuous employment in those pay grades. Therefore, Petitioner is not a "permanent State employee" as 
defined under Chapter 126 of the North Carolina General Statutes for the purpose of appealing an agency 
decision to the Office of Administrative Hearings and the State Personnel Commission, and, accordingly, the 
State Personnel Commission and the Office of Administrative Hearings lack jurisdiction over this appeal. 

ORDER AND FINAL DECISION 

It is therefore ORDERED that Petitioner's petition for a contested case hearing be DISMISSED for 
lack of jurisdiction. 

This the 15th day of October, 1993. 



Fred G. Morrison Jr. 
Senior Administrative Law Judge 



NOTICE 

In order to appeal a Final Decision, the person seeking review must file a Petition in the Superior 
Court of Wake County or in the superior court of the county where the person resides. The Petition for 
Judicial Review must be filed within thirty (30) days after the person is served with a copy of the Final 
Decision. G.S. 150B-46 describes the contents of the Petition and requires service of the Petition on all 
parties. 



I 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1502 



tttumnuiimmumit 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF GUILFORD 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

93EHR0003 



MCLEOD LEATHER & BELTING CO., INC. 
Petitioner, 



DEPARTMENT OF ENVIRONMENT, HEALTH, 
AND NATURAL RESOURCES 
Respondent. 



RECOMMENDED DECISION 



The above-captioned matter was heard by Michael Rivers Morgan, Administrative Law Judge on May 
24, 1993 and June 25, 1993 in High Point, North Carolina. 

APPEARANCES 

Ramona J. Cunningham, Smith, Helms, MuUiss and Moore, for the Petitioner. 

Donald W. Laton, Assistant Attorney General, for the Respondent. 

ISSUE 

Whether the Respondent properly and correctly denied the Petitioner's election to have the 
Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund to reimburse the Petitioner's costs 
for the cleanup of environmental damage resulting from a release of a petroleum product, based upon the 
Petitioner's alleged failure to pay annual tank operating fees which were due for the years 1990, 1991 and 
1992. 

STIPULATED FACTS 

The parties stipulated to the following facts in the Final Prehearing Order filed on May 24, 1993: 

a. On October 25, 1988, McLeod submitted an Underground Petroleum Storage Tank Fee Payment 
Form, which indicated that fees were being paid for two (2) tanks of greater than 3,500 gallons. 

b. The Payment Form and a check in the amount of $120.00 were received by the Respondent. 

c. The Petitioner's name and address were placed in the Respondent's database at that time. 

d. Petitioner was assigned Facility No. 0-027948 by Respondent. 

e. The Petitioner has never registered its tanks in accordance with 15 NCAC 2N .0303 by 
submission of either form 7530-1, GW/UST-1 or GW/UST-8. 

f. The Respondent sends invoices for annual fees to all parties that have registered underground 
storage tanks in North Carolina. 



1503 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



CONTESTED CASE DECISIONS 



^ 



g. The Respondent divided its invoicing system into four billing cycles. Tank owners are placed 
in a billing cycle according to their place in the alphabet. 

h. Petitioner was placed in the September 1 billing cycle (cycle #4). 

i. At no time did Respondent send an invoice to the Petitioner. 

j. Prior to Petitioner's removal of the tanks. Respondent did not send an invoice or any other 
correspondence or document to Petitioner. 

k. Following the initial payment on October 25, 1988, the Petitioner did not submit payments for 
tank fees. 

1. The tanks removed by Petitioner and for which trust fund reimbursement was sought and denied 
are the same tanks identified on the Payment Form submitted on October 26, 1988. 

FINDINGS OF FACT 

Based upon the evidence admitted at the hearing, the undersigned administrative law judge finds the 
following fects: 

1. Charles Vickers is employed with the Petitioner as its F*urchasing Manager. 

2. The Petitioner received a form from its jobber, BP Oil, which Vickers did not understand. 

3. Vickers contacted BP Oil for an explanation concerning the form which the Petitioner received, and 
was informed that the Petitioner needed to complete the form and send the form with a specified 
payment amount to the State of North Carolina because the State had established a fund. 

4. Loyd Rich is the President and C.E.O. of the Petitioner. 

5. Vickers discussed the form which BP Oil sent to the Petitioner with Rich. 

6. Vickers and Rich completed the form and sent it, along with a check, to the State of North 
Carolina. 

7. Based upon his conversation with a representative of BP Oil, it was Vickers' understanding that 
the Petitioner needed to complete the form to show that the Petitioner had oil storage tanks and to 
register for a fund which the State of North Carolina had created. 

8. It was Vickers' understanding that he did not need to do anything further, on behalf of the 
Petitioner, after submitting the form to the State of North Carolina. 

9. One of Vickers' responsibilities with the Petitioner includes the maintenance of its oil storage tanks. 

10. Vickers did not have any further communication or correspondence with the State of North 
Carolina after the Petitioner sent the form and payment to the State. 

11. It was Rich's understanding that the purpose of the form was to register the Petitioner's oil storage 
tanks with the State of North Carolina and the payment of a fee was for an insurance fund in the 
event that oil storage tanks leaked in the future. 

12. In 1992 the Petitioner submitted to the State of North Carolina a notice of the Petitioner's intent 
to remove the Petitioner's oil storage tanks. 



8:15 NORTH CAROLINA REGISTER November I, 1993 1504 



CONTESTED CASE DECISIONS 



13. The Petitioner worked with an environmental engineering company to remove the Petitioner's oil 
storage tanks, with the engineering company supervising the cleanup of the tanks. 

14. A representative of the environmental engineering company which worked with the Petitioner in 
the removal and cleanup of the Petitioner's oil storage tanks inquired as to whether the Petitioner 
had registered the tanks and paid fees in order that the Petitioner could proceed with a request for 
a reimbursement of funds for the cleanup. 

15. The Petitioner submitted a claim to the State of North Carolina for reimbursement of funds in 
connection with the removal and cleanup of the Petitioner's oil storage tanks, since Rich felt that 
the Petitioner had registered the tanks and paid fees a number of years ago. 

16. Annette Parker is employed with the Respondent's Division of Environmental Management, 
Groundwater Section, Pollution Control Branch, U.S.T. Unit as a Data Processing Coordinator. 

17. Parker's work duties with the Respondent include overseeing the documentation process concerning 
notification for underground storage tanks, registration forms, fee payment forms, invoices and 
updates of compliance information, as well as generating invoices, implementing applicable late 
penalties and generating statistical data and credit/debit adjustments which are necessary for the 
Respondent's fees. 

18. In order to generate an invoice, the Respondent must enter detailed tank information into its 
computer, such as the tank's size, age, contents, material construction and piping. 

19. The information which the Respondent requires in order to generate an invoice is indicated in the 
"Notification for Underground Storage Tanks" form which a tank owner would complete in order 
to register an underground lank with the Respondent. 

20. The "Notification for Underground Storage Tanks" form has been identified by different numerical 
designations such as Form 7530-1, GW/UST-1 and GW/UST-8. 

21 . A Notification for Underground Storage Tanks registration form contains a space to indicate the 
identification number for the facility at which the underground storage tank is located. 

22. The Respondent has difl^erent files on its computer database, including a master file which contains 
facility owner information, tank information and compliance information on the tanks, and a fee 
file which contains all payments received by the Respondent upon the generation of invoices. 

23. The master file and the fee file are joined together and intertwined by the identification number of 
the facility which has an underground storage tank. 

24. A fee payment form of the Respondent is not a lank registration form. 

25. In 1989, the Respondent assigned identification numbers to the approximately 25,000 facility sites 
which had storage tanks. 

26. In assigning identification numbers to facility sites, the Respondent searched each fee payment form 
which it received in order to determine the site's registration number or identification number. 

27. In situations in which the Respondent could not locate a tank registration form for a facility site 
for which the Respondent had received a facility fee payment form, the Respondent assigned a 
facility identification number solely to keep record of the received payment. 

28. Upon the Respondent's receipt of the Petitioner's fee payment form, the Respondent assigned a 
facility identification number to the Petitioner so that the Respondent could keep record of the 



1505 8:15 NORTH CAROLINA REGISTER November 1, 1993 



CONTESTED CASE DECISIONS 



^ 



) 



$120.00 payment which the Petitioner sent in 1988. 

29. Fees for storage tanks are paid annually to the Respondent. 

30. George Matthis is employed with the Respondent's Division of Environmental Management, 
Groundwater Section, Pollution Control Branch as the Supervisor of the State Trust Fund Group. 

31 . Matthis' work duties with the Respondent include overseeing reimbursements from the Commercial 
Leaking Petroleum Underground Storage Tank Cleanup Fund, which entails approving reasonable 
and necessary expenditures by reasonable parties who have conducted cleanups. 

32. Matthis reviewed a trust fund application for the Petitioner. 

33. After determining that the Petitioner's trust fund application was correctly completed and that the 
Petitioner was the statutory tank owner as indicated on the Petitioner's application, Matthis 
performed his normal routine of checking the Respondent's database after an application appears 
to be eligible for reimbursement. 

34. Matthis utilizes the fee payment screen of the Respondent's database, which would appear with 
dates of any invoices and the dates of fee payment concerning a facility location, in order to verify 
that a facility had paid all fees prior to the release being discovered for which reimbursement is 
sought. 

35. Matthis determined that the Petitioner had not paid all fees prior to the Petitioner's application for 
reimbursement from the trust fund, because the Petitioner's 1989 tank fees had been paid with no 
fee payments for the years 1990, 1991 and 1992. 

36. The Respondent did not have adequate information concerning the Petitioner's tanks upon which 
to base an invoice for fees for the tanks. 

37. All oil storage tank facilities which did not have tanks which were properly registered were placed 
in an invoice billing cycle by the Respondent, but none of the facilities were billed with invoices. 

38. Matthis determined that the Petitioner's application for reimbursement from the trust fund would 
be denied, based upon his finding that the Petitioner had paid no fees for its tanks since the 1989 
tank fees had been paid. 

39. In a letter to Rich from the Respondent's Acting Director of the Division of Environmental 
Management A. Preston Howard dated November 24, 1992, the Respondent indicated that the 
Petitioner's application to the Commercial Leaking Petroleum Underground Storage Tank Cleanup 
Fund for costs related to the Petitioner's cleanup of petroleum released from the Petitioner's 
underground storage tanks was being denied because all of the Petitioner's annual tank operating 
fees which were due for the year 1990, 1991 and 1992 had not been paid prior to the discovery 
of a release from the Petitioner's tanks on July 6, 1992. 

CONCLUSIONS OF LAW 

1. North Carolina General Statutes Section 143-215. 94B establishes the Commercial Leaking 
Petroleum Underground Storage Tank Cleanup Fund to be used for the payment of costs resulting 
from the cleanup of a discharge or release of a petroleum product from a commercial underground 
storage tank. 

2. N.C.G.S. §143-215. 94C(a) states, in pertinent part, that the owner or operator of a commercial 
petroleum underground storage tank shall pay to the North Carolina Secretary of Environment, 
Health, and Natural Resources for deposit into the Commercial Fund an annual operating fee. 



8:15 NORTH CAROLINA REGISTER November I, 1993 1506 



CONTESTED CASE DECISIONS 



3. N.C.G.S. §143-215. 94C(t) states, in pertinent part, that the annual operating fee shall be 
determined on a calendar year basis, with the annual operating fee being due and payable on the 
first day of the month in accordance with a staggered schedule established by the Department of 
Environment, Health, and Natural Resources. 

4. N.C.G.S. §143-215. 94E(g)(3) states, in pertinent part, that no owner or operator shall be 
reimbursed pursuant to the Commercial Leaking Petroleum Underground Storage Cleanup Fund 
if the owner or operator has failed to pay any annual tank operating fee due pursuant to G.S. 
§143-215. 94C. 

5. Title 15A, Chapter 2P, Section .0301(a) of the North Carolina Administrative Code states that the 
owner or operator of each commercial underground storage tank shall pay all annual tank operating 
fees due for that underground storage tank. 

6. 15A NCAC 2P .0301(b) states, in pertinent part, that the Division of Environmental Management 
shall send an invoice, for the amount of the annual operating fees due, to the owner or operator 
of any commercial petroleum underground storage tank in use on January 1 of the year and which 
has been registered with the Department . (EMPHASIS ADDED) 

7. 15A NCAC 2P .0301(c) states, in pertinent part, that any owner or operator not receiving an 
invoice for annual operating fees shall still pay any fees due. 

8. 15A NCAC 2P .0401(b) states, in pertinent part, that an owner or operator of a commercial 
underground storage tank is not eligible for reimbursement for costs related to releases if any 
annual operating fees due have not been paid in accordance with 15A NCAC 2P .0301 prior to 
discovery. 

9. The Petitioner, as the owner of two oil storage tanks, was required to pay to the Respondent an 
annual operating fee for deposit into the Commercial Leaking Petroleum Underground Storage 
Tank Cleanup Fund for each of its underground tanks. 

10. While the Respondent's Di\ision of Environmental Management did not send a billing in\oice to 
the Petitioner for the Petitioner's underground storage tank annual operating fees for the years 
1990, 1991 and 1992, this is attributable to the Petitioner's failure to properly register its 
underground storage tanks with the Respondent and the Petitioner's lack of receipt of annual billing 
invoices from the Respondent did not absolve the Petitioner from its obligation to pay the annual 
operating fees for the underground storage tanks. 

H. The Petitioner is not eligible for reimbursement of its costs, pursuant to the provisions of the 
Commercial Leaking Petroleum Underground Storage Cleanup Fund, which are related to the 
cleanup of a release from the Petitioner's oil storage tanks, because the Petitioner failed to pay 
annual tank operating fees which were due for the years 1990, 1991 and 1992 prior to the 
discovery of the release on July 6, 1992. 

12. The Respondent properly and correctly denied the Petitioner's election to have the Commercial 
Leaking Petroleum Underground Storage Tank Cleanup Fund to reimburse the Petitioner's costs 
for the cleanup of environmental damage resulting from a release of a petroleum product, based 
upon the Petitioner's failure to pay annual tank operating fees v.'hich were due for the years 1990, 
1991 and 1992. 

RECOMMENDATION 

It is recommended that the Respondent's denial of the Petitioner's application for reimbursement from 
the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund be upheld. 



1507 8:15 NORTH CAROLINA REGISTER November I, 1993 



CONTESTED CASE DECISIONS 



ORDER 

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative 
Hearings, P.O. Drawer 27447, Raleigh, N.C. 2761 1-7447, in accordance with North Carolina General Statute 
150B-36(b). 

NOTICE 

The agency making the final decision in this contested case is required to give each party an 
opportunity to file exceptions to this recommended decision and to present written arguments to those in the 
agency who will make the final decision. G.S. 150B-36(a). 

The agency is required by G.S. 150B-36(b) to serve a copy of the final decision on all parties and to 
furnish a copy to the parties' attorney of record and to the Office of Administrative Hearings . 

The agency that will make the final decision in this contested case is the North Carolina Department 
of Environment, Health, and Natural Resources. 

This the 1 1th day of October, 1993. 



Michael Rivers Morgan 
Administrative Law Judge 



) 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1508 



pmni HH W i o i ir 



NORTH CAROLINA ADMINISTRATIVE CODE CLASSIFICATION SYSTEM 



1 he North Carolina Administrative Code (NCAC) has four major subdivisions of rules. Two of these, 
titles and chapters, are mandatory. The major subdivision of the NCAC is the title. Each major 
department in the North Carolina executive branch of government has been assigned a title number. 
Titles are further broken down into chapters which shall he numerical in order. The other two. 
subchapters and sections are optional subdivisions to be used by agencies when appropriate. 



TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATIVE CODE 
TITLE DEPARTMENT LICENSING BOARDS CHAPTER 



1 


Administration 


Acupuncture 


1 


2 


Agriculture 


Architecture 


2 


3 


Auditor 


Auctioneers 


4 


4 


Commerce 


Barber Exammers 


6 


5 


Correction 


Certified Public Accountant Examiners 


8 


6 


Council of State 


Chiropractic Examiners 


10 


7 


Cultural Resources 


General Contractors 


12 


8 


Elections 


Cosmetic Art Examiners 


14 


9 


Governor 


Dental Exammers 


16 


10 


Human Resources 


Dietetics/Nutrition 


17 


11 


Insurance 


Electrical Contractors 


18 


12 


Justice 


Electrolysis 


19 


13 


Labor 


Foresters 


20 


14A 


Crime Control & Public Safety 


Geologists 


21 


15A 


Environment, Health, and Natural 


Hearing Aid Dealers and Fitters 


22 




Resources 


Landscape Architects 


26 


16 


Public Education 


Landscape Contractors 


28 


17 


Revenue 


Marital and Family Therapy 


31 


18 


Secretary of State 


Medical Exammere 


32 


19A 


Transportation 


Midwifery Joint Committee 


33 


20 


Treasurer 


Mortuary Science 


34 


*21 


Occupational Licensing Boards 


Nursmg 


36 


22 


Administrative Procedures 


Nursing Home Administrators 


37 


23 


Community Colleges 


Occupational Therapists 


38 


24 


Independent Agencies 


Opticians 


40 


25 


State Personnel 


Optometry 


42 


26 


Administrative Hearings 


Osteopathic Examination & Reg. (Repealed) 


44 






Pharmacy 


46 






Physical Therapy Examiners 


48 






Plumbing, Heating & Fire Sprinkler Contractors 


50 






Podiatry Examinere 


52 






Practicing Counselors 


53 






Practicing Psychologists 


54 






Professional Engineers & Land Surveyors 


56 






Real Estate Appraisal Board 


57 






Real Estate Commission 


58 






Refngeration Exammers 


60 






Sanitarian Examiners 


62 






Social Work Certification 


63 






Speech & Language Pathologists & Audiologists 


64 






Therapeutic Recreation Certification 


65 






Veterinary Medical Board 


66 



Note: Title 21 contains the chapters of the various occupational licensing boards. 



1509 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



CUMULATIVE INDEX 



\ 



Pages 



CUMULATIVE INDEX 

(April 1993 - March 1994) 



Issue 



1 - 92 1 - April 

93 - 228 2 - April 

229 - 331 3 - May 

332 - 400 , 4 - May 

401 - 455 5 - June 

456 - 502 6 - June 

503 - 640 7 - July 

641 - 708 8 - July 

709 - 792 9 - August 

793 - 875 10 - August 

876 - 1006 11 - September 

1007 - 1184 12 - September 

1185 - 1307 13 - October 

1308 - 1367 14 - October 

1368 - 1512 15 - November 



Unless otherwise identified, page references in this Index are to proposed rules. 



ADMINISTRATION 

Administration's Minimum Criteria, 5 

Low-Level Radioactive Waste Management Authority, 232 

State Employees Combined Campaign, 1008 

ADMINISTRATIVE HEARINGS 

Civil Rights Division, 370 
General, 366 
Hearings Division, 1480 
Rules Division, 367 

AGRICULTURE 

Aquaculture, 1212 
N.C. State Fair, 506 
Plant Industry, 513, 1212 
Standards Division, 1212 
Veterinary Division, 515, 1212 

COMMERCE 

Alcoholic Beverage Control Commission, 408, 711, 1310 

Banking Commission, 408, 798, 1312 

Cemetery Commission, 810 

Savings Institutions Division: Savings Institutions Commission, 461 

State Ports Authority, 8 1 1 

ENVIRONMENT, HEALTH, AND NATURAL RESOURCES 

Coastal Management, 279, 571, 962, 1405 
Comprehensive Conservation and Management Plan, 882 
Departmental Rules, 465 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1510 



^mrmntfmrtrrrtrr- ^nnipr-a-vm h it i iMtfmum n 



CUMULATIVE INDEX 



Environmental Management, 210, 556, 658, 797, 893, 1254 

Health Services, 283, 335, 425, 465, 572, 709, 762, 966, 1098, 1417 

Marine Fisheries, 28, 568 

Mining: Mineral Resources, 829 

NPDES Permit, 710 

Soil and Water Conservation Commission, 214, 1322 

Wildlife Resources Commission, 32, 663, 831, 965, 1255, 1409 

Zoological Park, 337 

FINAL DECISION LETTERS 

Voting Rights Act, 4. 407, 460, 795, 880, 1371 

GENERAL STATUTES 

Chapter 7A, 1185 
Chapter 150B. 1187 

GOVERNOR/LT. GOVERNOR 

Executive Orders, 1, 93, 229, 332, 401, 456, 641, 793, 876, 1007, 1209, 1308, 1368 

HUMAN RESOURCES 

Aging, Division of, 815, 1372 

Blind, Services for the, 884 

Deaf and Hard of Hearing, Services for the, 650 

Facility Services, 94, 883, 1014, 1215, 1312 

Medical Assistance, 25, 414. 553, 712, 888, 1316 

Medical Care Commission, 644, 1312 

Mental Health, Developmental Disabilities and Substance Abuse Services, 7, 413, 516, 1086, 1217 

Social Services Commission, 237, 733, 1091, 1376 

INSURANCE 

Actuarial Services, 555, 657, 1249, 1321, 1403 
Agent Services Division, 1399 
Engineering and Building Codes Division, 1248 
Financial Evaluation Division, 1093, 1317 
Life and Health Division. 1094, 1318, 1400 
Medical Database Commission. 463, 737 
Property and Casualty Division, 1400 
Special Services Division, 1096 

JUSTICE 

Alarm Systems Licensing Board, 761 

Attorney General. Office of the. 28 

Criminal Justice Education and Training Standards Commission, 253 

Criminal Justice Standards Division, 241 

Departmental Rules. 1096 

Private Protective Services Board. 252, 890 

Sheriffs' Education and Training Standards Commission, 738 

LABOR 

OSHA, 97, 231, 278, 892 

LICENSING BOARDS 

Architecture, 43 

Certified Public Accountant Examiners, 1418 

Cosmetic Art Examiners. 969 



1511 8:15 NORTH CAROLINA REGISTER November 1, 1993 



f 



I 



€ 



CUMULATIVE INDEX 



Dental Examiners, State Board of, 763 

Electrolysis Examiners, Board of, 841, 1457 

Foresters, Registration for, 674 

Geologists, Board of, 285 

Landscape Architects, 1256 

Medical Examiners, Board of, 591, 1458 

Mortuary Science, Board of, 45, 342, 971, 1461 

Nursing, Board of, 1463 

Nursing Home Administrators, 346 

Occupational Therapy, 1469 

Opticians, Board of, 1261 

Pharmacy, Board of, 47, 354, 1326 

Physical Therapy Examiners, 53, 767 

Plumbing, Heating and Fire Sprinkler Contractors, 360 

Practicing Psychologists, Board of, 844 

Real Estate Commission, 53, 364 

Refrigeration Examiners, 1148 

Social Work, Certification Board for, 428 

Therapeutic Recreation Certification Board, 1328 

LIST OF RULES CODIFIED 

List of Rules Codified, 61, 290, 432, 593, 769, 845, 1264 

PUBLIC EDUCATION 

Elementary and Secondary Education, 427, 470 

STATE PERSONNEL 

Office of State Personnel, 286, 972, 1262, 1472 

STATE TREASURER 

Retirement Systems, 337, 1146 

TAX REVIEW BOARD 

Orders of Tax Review, 503 

TRANSPORTATION 

Highways, Division of, 669, 836 
Motor Vehicles, Division of, 1145 



8:15 



NORTH CAROLINA REGISTER 



November 1, 1993 



1512 



f 



I 



i 



NORTH CAROLINA ADMINISTRATIVE CODE 



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I 



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